ESSO : Annual Report 2009

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02 message from the chairman

05 general information

06 our business

09 risk factors

13 financial highlights

14 our performance

18 management's discussion and analysis

22 growing with thais

29 report of the audit committee

30 shareholding and management structure

38 corporate governance

43 internal controls

45 related party transactions

50 board of directors and executives

57 statement of directors’ responsibilities

for financial reporting

59 financial statements

contents

The term "ExxonMobil" refers to any one or more of Exxon Mobil Corporation

and/or any of its subsidiaries or affiliates, as the text may require. "We", "Our",

"Us", “Esso”, and the "Company" refers to Esso (Thailand) Public Company

Limited, a public company with limited liability registerd in the Kingdom of

Thailand and its consolidated subsidiaries.

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� Esso (Thailand) Public Company Limited 2009 Annual Report

messagefrom the chairman

To Our Shareholders

Despite a difficult business and economic environment Essodelivered solid financial results in 2009. Net income wasBaht 4.5 billion and we also generated cash flow from

operations of Baht 4.5 billion. Demonstrating our commitmentto our shareholders we have distributed a total of Baht 6.1billion in dividends since our IPO in May 2008. Businessconditions remain challenging but these results demonstratethe strength of our long-term business model.

Production levels for our integrated Refining and Paraxyleneoperations were primarily determined by economics andproduct demand in 2009. Crude throughput at the refineryaveraged 134 thousand barrels a day, in line with 2008.Paraxylene production was 368 thousand tons, 16% higher

than in 2008 due to improved margins for aromatic products.We continued our efforts to enhance margins by maximizingproduction of higher value products and minimizing rawmaterials costs. Particular emphasis was placed onprocessing challenged crudes, utilizing advantaged

technology and implementing self-help improvementprograms.

Our Fuels Marketing business continued to provide a secureand reliable outlet for refining production while providing our

customers with high-quality products. With our logistical andoperational advantages, we are well-positioned to competein these highly competitive markets and have maintainedour position as the second largest fuels retailer in Thailand.Retail promotional programs were conducted during 2009 to

improve engagement with our customers, and we alsocontinued to develop our relationships with our alliancepartners.

Mobil 1, our flagship lubricant brand, is the world's leadingsynthetic motor oil. In 2009, we achieved outstanding

performance in our Lubricants business with record sales ofMobil 1, and we successfully expanded the network of Mobil1 lube change centers from 8 at the start of 2009 to 38centers by the end of the year.

Safety continues to be our top priority. Esso recorded zerolost time incidents in 2009 and we further reduced our totalrecordable injury rate for employees and contractors. This isevidence of the commitment, training, and performance ofour workforce.

We believe that our capable and dedicated employees areour company's greatest strength. Our employees arecommitted not only to the results they deliver, but also toupholding high ethical and business control standards in

every aspect of our operations.

Our commitment to being a good corporate citizen is anextension of our ethical standards. Protecting our employees,supporting local communities, and safeguarding the

environment are principles of corporate citizenship that webelieve are a priceless asset.

messagefrom the chairman

Esso (Thailand) Public Company Limited 2009 Annual Report �

I believe that our competitive advantages position us well tomeet the future challenges in our business. Esso will

continue to deliver strong performance through disciplinedinvestment, our ongoing commitment to technology, andthrough maintaining our focus on safety and operationalexcellence.

On behalf of the Board, I would like to express myappreciation to our shareholders, dealers andcustomers for your continued support of Esso (Thailand)Public Company Limited.

Robert Michael Cooper

Chairman and Managing Director

Esso (Thailand) Public Company Limited


general informationour businessrisk factors


general information

Company information:

Company Name Esso (Thailand) Public Company Limited

Symbol ESSO

Registration Number 0107539000073

Business Integrated petroleum refining, petrochemical, and marketing

Registered Capital Baht 17,110,007,246.71

Comprising 3,467,916,666 common shares of Baht 4.9338 per share

Paid-up Capital Baht 17,075,181,200.40

Comprising 3,460,858,000 common shares of Baht 4.9338 per share

Head Office 3195/17-29 Rama IV Road, Klong Ton

Klong Toey District, Bangkok 10110

Telephone: 02 262-4000

Website www.esso.co.th

Investor Relations Telephone: 02 262-4788

E-mail: [email protected]

References:

Securities Registrar Thailand Securities Depository Company Limited

The Stock Exchange of Thailand Building, 62 Ratchadapisek Road,


Telephone: 02 229-2888 (Call Center)

Auditor PricewaterhouseCoopers ABAS Limited

15th Floor, Bangkok City Tower,

179/74-80 South Sathorn Road, Bangkok 10120



our business

The Company is an affiliate of Exxon Mobil Corporation, an industry leader in the global energy business. We andour predecessor companies have operated businesses in Thailand for over 100 years.

We subscribe to ExxonMobil's highly disciplined businessapproach with a focus on long-term fundamentals andgrowing shareholder value. The benefits of being a majorityowned ExxonMobil affiliate include access to expertise incrude oil and raw material procurement services, globalsales network for refined petroleum products and chemicals,advanced technological, operational and engineeringservices, and research and development programs. Wealso benefit from the use of Esso and other ExxonMobiltrademarks licensed from ExxonMobil, the availability ofExxonMobil and affiliated management and technicalpersonnel and corporate support services provided byExxonMobil.

We are an integrated petroleum refining, petrochemical andmarketing company with the following key businesses:

A complex refinery with a maximum rated capacity(based on stream days) of 177,000 barrels per day

An aromatics plant with a capacity of 500,000 tonsper annum of paraxylene

A solvent production unit with a capacity of 50,000tons per annum

An extensive network of Esso branded retail servicestations throughout Thailand

Direct commercial sales of petroleum products in theindustrial, wholesale, aviation and marine sectorscomprising LPG, gasoline, jet fuel/kerosene, diesel,fuel oil and asphalt, and also lubricants

Sales of aromatics and other chemical products

Our refinery configuration incorporates ExxonMobil's unique proprietarytechnologies that provide us with significant flexibility to handle a wide range ofcrude oils and to produce a high proportion of high-value products such asgasoline, diesel, and jet fuel. Our refinery is strategically located near the LaemChabang deep sea port in Sriracha, Chonburi province. The site benefits from itsready access to a deep sea port, road networks, and a multi-product transmissionpipeline that allows the flexibility to deliver our refined petroleum products viapipeline in addition to truck and marine transportation.

Our aromatics production is fully integrated with our refinery operations. Weproduce aromatics primarily in the form of paraxylene which is used to makepurified terephthalic acid (PTA), the raw material for producing polyester film,packaging resin and fabrics. Our other chemical products include solvents andplasticizers.


Revenue Structure :

Our sales revenue in downstream and petrochemical segments can be broken down as follows:

(1) Mainly sales of crude oil which were purchased from an affiliate but resold before processing. Also included are goods sold atconvenience stores.

(2) Mainly franchise fees from dealers, product handling and storage fees from aviation customers, and rental income.

(3) Mainly sales of benzene, solvents, plasticizers, and other chemicals.

2009 2008 2007

Million Baht % Million Baht % Million Baht %

Net Sales

Downstream segment:

Refined petroleum products 142,287 87.3 196,079 88.2 172,775 86.4

Lubricants 3,057 1.9 3,286 1.5 3,459 1.7

Others (1) 986 0.6 3,808 1.7 4,388 2.3

Services (2) 515 0.3 455 0.2 476 0.2

Total Downstream segment 146,845 90.1 203,628 91.6 181,098 90.6

Petrochemical segment:

Paraxylene 11,863 7.3 11,988 5.4 15,999 8.0

Others (3) 4,137 2.6 6,556 3.0 2,807 1.4

Services 65 0.0 62 0.0 0 0.0

Total Petrochemical segment 16,065 9.9 18,606 8.4 18,806 9.4

Total Sales revenue 162,910 100.0 222,234 100.0 199,904 100.0

Number of employees of the Company as of December 31, 2009 :

Corporate Refining & Distribution (1) Retail & Lubricants (2) Chemicals Total

34 543 119 17 713

(1) Includes engineers, technical staff and operators at Sriracha refinery, also commercial and export sales personnel

(2) Includes retail and lubricant sales personnel


Subsidiaries, Associated and Related Companies :

Business

Currently

dormant

Real estate

leasing

Real estate

leasing

Real estate

leasing

Service station

and

convenience

store operation

Petroleum

products

pipeline

transportation

Aircraft

refuelling

services

Registered Capital

(Baht)

3,333,000

3,333,400

10,000,000

10,000,000

50,000,000

8,479,000,000

509,998,044

Shareholding

100%

30%

49%

33% (1)

0% (2)

21%

7%

Company Name and address

Mobil Enterprises (Thailand) Limited (METL)

3195/17-29 Rama IV Road, Klong Ton,



Industry Promotion Enterprises Limited (IPEL)

3195/26 Rama IV Road, Klong Ton,



United Industry Development Company Limited (UIDC)

3195/27 Rama IV Road, Klong Ton,



Pacesetter Enterprise Limited (PSE)

3195/27 Rama IV Road, Klong Ton



Thai C-Center Company Limited (TCC)

3195/21 Rama IV Road, Klong Ton



Thai Petroleum Pipeline Company Limited (THAPPLINE)

2/8 Moo 11, Lumlukka Road, Ladsawai,

Lumlukka, Pathumthani 12150


Bangkok Aviation Fuels Services

Public Company Limited (BAFS)

171/2 Moo 10, Vibhavadi Rangsit Road,

Sikan, DonMuang, Bangkok 10210


(1) The remaining shares are held by UIDC and IPEL.

(2) Company does not directly hold shares in TCC. All of TCC's issued shares are held by UIDC.

Esso (Thailand) Public Company Limited 2009 Annual Report

risk factors

The Company acknowledges the existence of a number of risks that could affect its operations as described below.All of these could materially adversely affect its business, financial condition, cash flow or results of operations andprospects.

1. Risk from market prices for crude oil and otherfeedstocks, refined petroleum products andaromatics and other chemical products

The prices at which we purchase our raw materials andthe prices that we charge for our products are set basedon market prices. These market prices are volatile andare subject to a variety of factors that are beyond ourcontrol.

Although increases or decreases in the price of rawmaterials may result in corresponding increases ordecreases in the price of refined petroleum and petro-chemical products, there can be no assurance that suchprices will correspond in the same proportion, or at all.Any inability to pass on increases in the market price ofraw materials to our customers may affect our business.

Any increase in the price of crude oil may also increaseour short-term financing needs. Although we have notrecently experienced difficulties in securing tradefinancing, any such difficulties in securing trade financingon favorable terms may adversely affect our business.

2. Risk from fluctuations in the value of the Bahtagainst foreign currencies

We are exposed to changes in exchange rates forcommercial sales and purchases denominated in foreigncurrency. And since our Baht denominated domesticsales are also linked to US dollar-based regional refinedproduct prices, the fluctuations in the value of the Bahtagainst the US dollar also affect our business. If the USdollar appreciates significantly, we may not be able topass on the higher cost to our customers. Conversely, adecline in the value of US dollar against the Baht couldhave a negative effect on revenue reported in Baht,which may impact our ability to repay our Bahtdenominated debt.

3. Risk of loss from business operations

Our operations are subject to hazards and risks inherent in refining,transporting, and storing crude oil and products such as fire, explosion,spills, mechanical failure of equipment, and natural disasters. These riskscould cause personal injury or loss of life, severe damage to or destructionof our properties and the properties of others and environmental pollution,and may result in suspension of operations and the imposition of civil orcriminal penalties.

We do not carry business interruption insurance and our insurance policiesmay not adequately cover large losses resulting from severely damagedfacilities. Our business, financial condition, cash flow or results of operationsand prospects may be materially adversely affected by such losses. Inaddition, our insurance policies do not cover any penalties or fines or otherpayments to the Thai government as a result of any of these risks.


4. Risk from government intervention in pricing decisions and other government laws and regulations

We and other petroleum companies in Thailand operate in a heavily regulated environment under the supervision of theGovernment. Our business could be directly affected by Government policy and regulations or any changes thereof. Inparticular, the Government may intervene in pricing decisions of refineries and retailers in order to pursue Thailand'smacroeconomic and social objectives.

Moreover, our ability to operate our business in Thailand is subject to the Government issuing us a factory operatingpermit which is renewed every five years. If this permit is not renewed or cancelled for any reason, we may not be able tocontinue operating the refinery.

5. Risk from changes in environmental laws andregulations

We are subject to extensive and increasingly stringentenvironmental laws, regulations and standards such asthose relating to air emissions, accidental spills,discharges of hazardous materials or other pollutantsinto the environment. Some of these laws andregulations require our production facilities to operateunder permits that are subject to renewal or modification.A violation of these laws, regulations or permitconditions could result in substantial fines and forcedfacility shutdowns.

New environmental laws and regulations, newinterpretation of existing laws, increased governmentalrequirements or other developments in the future mayrequire additional investment or cause us to incuradditional operating expenses in order to maintain ourcurrent operations, or curtail our production activities, orrequire us to take other actions that could have amaterial adverse effect on our financial condition,results of operations and cash flow. For example, theGovernment has implemented new standards for motorfuels that require lower sulfur and benzene levels ingasoline and lower sulfur levels in diesel fuel whichmust be met by January 1, 2012. In order to continueselling our gasoline and diesel fuel production in thedomestic market, we are progressing activities to allowinvestment to be made consistent with the deadline forthe new fuels specification. If the final decision on theproject is made, we will likely need to make a substan-tial capital investment prior to January 1, 2012.

Furthermore, new environmental standards orrequirements could be imposed without adequatenotice for compliance. We may not be able to obtainwaivers or temporary dispensations if we are unable tomeet the deadlines and in such circumstances, we mayneed to shut down or curtail affected operations.

6. Risk from a significant interruption in theoperations of our refinery and aromatics plants

Various components of our production facilities aretemporarily shut down for routine maintenance fromtime to time. Any prolonged shutdown, unscheduledshutdown because of mechanical equipment failure, orsignificant interruption to our operations as a result ofindustrial accidents or natural disasters would affectour production volumes and could materially andadversely impact our business, financial condition,results of operations and prospects.

7. Our leverage may limit our financial flexibility

Our proportion of financial debt to total equity as ofDecember 31, 2009 was 1.2. We may incur additionalindebtedness in the future although our ability tofinance such indebtedness may be restricted by existingbank credit facilities. The level of our indebtedness willhave several important effects on our future operations.


Our ability to meet our debt service obligations and toreduce our total indebtedness is dependent upon ourfuture financial performance which is subject togeneral economic conditions and several factors whichare beyond our control. We cannot assure that ourbusiness will continue to generate sufficient cash flowfrom operations to service our indebtedness. If we areunable to do so, we may be required to sell assets, torefinance, or to obtain additional financing. Suchrefinancing may not be possible and additional financingmay not be available on commercially acceptable termsor at all.

Some of our bank credit facilities impose financial andother restrictions on us. Failure to comply with suchrestrictions may result in a debt default and could leadto acceleration of the payment of such debt or anyinstruments evidencing indebtedness that containcross-acceleration or cross-default provisions. In suchevent, we may not be able to refinance or otherwiserepay such indebtedness.

8. Risk of interest rate fluctuations

Our debts are mostly tied to floating interest rates whichmay fluctuate from time to time depending on marketconditions. If borrowing costs are substantiallyincreased because of increased interest rates, ourbusiness may be affected.

10. Dependence on Exxon Mobil Corporation and/or its affiliates for numerous support services andsenior staff

We are highly dependent on Exxon Mobil Corporation and/or its affiliates with respect to several aspects of our operations,including access to expertise in crude oil and raw material procurement services, a global sales network for refinedpetroleum products and chemicals, advanced technological, operational and engineering services, research anddevelopment programs, trademarks and other services. We cannot assure that Exxon Mobil Corporation and/or itsaffiliates will continue to provide support to us. If we were to lose the support of Exxon Mobil Corporation and/or itsaffiliates, or if any of our significant agreements with Exxon Mobil Corporation and its affiliates were terminated, and weare unable to secure alternate sources for such services or recruit additional key personnel, this could affect our business.Many of the agreements we have with ExxonMobil for services, technology, trademarks and other support services containautomatic termination clauses in the event Exxon Mobil Corporation directly or indirectly ceases to own or control more than50% of the ownership interest in the Company. Certain preemption rights apply if ExxonMobil shareholders wish to reducetheir aggregate shareholdings in the Company to below 50%.

Our ExxonMobil shareholders are not bound to retain any minimum interest in the Company and may reduce theirshareholdings in the Company. In addition, Exxon Mobil Corporation and its affiliates are not obligated to grant loans tous or provide any other type of financial assistance and there can be no assurance that they will do so in the future.

9. Risk of current and future litigation

We are defendants in a variety of litigation cases in theordinary course of business. In one case, we have anoutstanding judgment against us for Baht 436 Million foralleged underpayment of custom duties. We have filedan appeal to the Supreme Court against the judgment.While we continue to believe strongly in the merits ofour appeal, we cannot provide any assurance that wewill be successful in the appeal.

Any significant new litigation with an unfavorableoutcome could have a material adverse effect on ourbusiness, cash flow, financial condition, results ofoperations and prospects.


financial highlightsour performancemanagement’s discussion and analysisgrowing with thais


financial highlights

Financial Highlights 2009 2008 2007

(millions of Baht, unless otherwise stated)

Sales revenue 162,910 222,234 199,904

Gross profit/(loss) 11,134 (4,252) 15,048

EBITDA 8,417 (7,058) 12,603

Net profit/(loss) 4,451 (6,864) 7,054

Basic earnings/(loss) per share (Baht) (1) 1.3 (2.2) 6.6

Adjusted earnings/(loss) per share (Baht) (2) 1.3 (2.0) 2.0

Total assets 62,015 55,070 70,814

Total liabilities 37,940 34,650 46,419

Total shareholders' equity 24,075 20,420 24,395

Key Financial Ratios 2009 2008 2007

Net profit/(loss) margin (%) 2.7 (3.1) 3.5

Interest coverage (x) 15.5 N/A 3.7

Net debt to equity (x) 1.1 1.3 1.4

Dividend Payment for the Operating Results 1H 2009 2008 2007

Dividend payment (Baht/share) 0.25 (3) 0.5 1.0

(1) Based on weighted average number of shares during the period

(2) Based on current number of shares: 3,461 million shares

(3) Interim dividend payment for year 2009

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our performance

Refining and Petrochemical

Production levels of our refining and paraxylene units were primarily determined by market demand and economics. Webenefited from the integration of our refining and petrochemical operations which provides us with greater flexibility toproduce higher-value products, optimize operations, and realize cost savings.

Our refinery's crude run was 134 thousand barrel per day in 2009, below full capacity levels reflecting current demand forpetroleum products and planned maintenance on our Atmospheric Pipestill-1 (APS-1) and Vacuum Distillation Unit-2 (VPS-2)units. Work activities included the replacement of (VPS-2) Wash Bed packing and the decoking of furnaces for both units whichwill enhance unit energy efficiency and product yields.

Paraxylene production was 368 thousand tons in 2009, 16% higher than in 2008. The increase was mainly due to theimprovement in economic conditions for aromatics products. While the sales realization of paraxylene decreased in 2009, thecost of raw materials decreased by a greater extent, resulting in improved paraxylene margins. Consistent with our strategyto optimize our earnings through integration, we optimized paraxylene production based on integrated manufacturingeconomics.

In addition to production levels, product margins were a key factor affecting our financial performance. While we cannotcontrol margin fluctuations, which are driven by overall industry trends, we continue d our efforts to enhance margins bymaximizing production of higher value products and minimizing raw material costs. Particular emphasis was placed onprocessing challenged feedstocks, utilizing technology and implementing self-help improvement programs.

Challenged Raw Materials: we continued to processchallenged feedstocks, which generally have a pricediscount due to more complex processing requirementsfor these crudes. In terms of total processed volume,challenged feedstocks accounted for 30% of totalcrude runs. This was made possible by our ability toutilize ExxonMobil’s global crude procurementnetwork.

ExxonMobil Technology: we continue to utilizeExxonMobil's Molecule Management technology.This consists of advanced molecular fingerprintingand modeling technology to optimize and analyze thebehavior and characteristics of materials movingthrough our refinery on a real time basis. We wereable to precisely source and select crudes withproperties that optimize the yields of higher valueproducts. In addition, we applied ExxonMobil's feedinjection technology to enhance our catalytic crackingunit which upgrades heavier oil to higher-value fuelsand chemical feedstocks for our aromatics plant.

Other Self-Help: we pursued self-help programsand used ExxonMobil's global network resources toassist in identifying areas of improvement based onglobal best practices, particularly in relation to rawmaterial diversification, new emerging crudeprocessing opportunities, yield improvement andnew technology to de-bottleneck profitable units.Our self-help initiatives include a continuedemphasis on energy efficiency, where examplesinclude successful implementation of on-linefurnace convection cleaning and theimplementation of steam optimization initiatives.

For our distribution terminals, we continue to utilize and manage our assets to improve overall efficiency and achieve lowestoperating cost for our operations.


Marketing

We sold our petroleum products through diversifiedchannels including retail, commercial, and export marketsfor optimal product realization.

Esso's service stations continued to provide a secure,value-added and reliable outlet for our refinery; salesthrough our service stations accounted for 37% of total salesvolumes in 2009.

With our logistical and other operational advantages, wewere well-positioned to compete in this dynamic andcompetitive market. As of year-end, we had 537 servicestations with 16.7%* of product sales in the marketmaintaining our position as the second largest fuels retailerin Thailand.

for 45% of total sales volumes in 2009. We continued tofocus on sales network efficiency enhancements. In additionto the Global Professional Sales Process used by oursalespersons in dealing with our customers, we adopted theBenefit Selling approach to better understand our customers'needs so that we can better serve those needs whileimproving efficiency and business effectiveness. Wecontinued to maintain a disciplined approach to CreditManagement and improved overdue and bad debtsperformance despite intense competition and unfavorableeconomic conditions.

The remaining 18% of our petroleum products wereexported, mainly within the Asia Pacific region.

We further optimized our network, making opportunisticenhancements to our stations while maintaining capital andcost discipline. Enhancements included a forecourt andrestroom improvement program at a number of our servicestations nationwide.

In addition to income from the sale of fuels at our servicestations, we also worked on enhancing non-fuels revenuessuch as income from our Tiger Marts. Monthly promotionswere run to provide customers with more choices andgreater convenience. We also sought opportunities forstrategic alliances with partners, including Wizard car washand Rabika Coffee to optimize our retail sites' profitability.

Our commercial channels included sales through our threebusiness-to-business segments; Industrial and Wholesale,Aviation, and Marine. Sales through this channel accounted

In 2009, we achieved outstanding performance in ourLubricants business. We achieved record sales of Mobil 1motor oil, the world's leading synthetic motor oil, throughvarious marketing and sales activities. We aggressivelyexpanded our business through the Mobil 1 Center network.These Mobil 1 Centers provide professional lube changeservice and superior care for customers vehicles. In 2009,30 new Mobil 1 Centers were opened bringing the total to 38operating sites at the end of the year. We also suppliedlubricant products to key strategic customers includingToyota, Mercedes-Benz, Porsche, and B-Quik.

More than 90% of our aromatics products, Paraxylene andBenzene, were sold domestically to commercial customers.Other chemical products including solvents and plasticizerswere also sold to commercial customers locally.

* Source: Department of Energy Business


Safety and Quality Control

Safety continues to be our top priority. Esso recorded zeroloss time incidents in 2009 and we further reduced our totalrecordable injury rate for employees and contractors. This isevidence of the commitment, training, and performance ofour workforce.

Our Operations Integrity Management System (OIMS)provided a robust framework for managing the safety of ourpersonnel and operations, occupational health and environ-mental protection. Our safety management process focusedon underlying behaviors as well as enhancements to ourfacilities, systems, and competencies.

Our approach to safety and health management is yieldingresults, but we will not be satisfied until we have achieved awork environment in which Nobody Gets Hurt - our unifyinggoal.

Our quality control system ensures the quality of our productsfrom the refinery to our customers. Every shipment of refinedproduct is certified to fully meet the respective specifications,and we closely monitor the quality of our retail fuel productsincluding the use of a mobile fuel quality team travelingnationwide to monitor and ensure our product quality.

Environmental Care

We conducted regular reviews to ensure compliance withenvironmental laws and regulations and our internal policiesin all aspects of our business. We implement variouspollution control and other environmental impact mitigationmeasures to control our waste emissions, including applyingExxonMobil's advanced technologies to reduce emissionsand conserve resources. Key examples include:

Our three cogeneration gas turbine generatorsreduce greenhouse gas emissions by efficientlygenerating electricity and are also designed for lownitrogen oxide emissions compared to conventionalelectricity generation.

Our refinery operations use and recycle fresh waterproduced by our two desalination plants, thus savingnatural fresh water resources.

Our Global Energy Management System (GEMS)ensures efficient use of energy in our operations onan ongoing basis and also helps to identify facilityenhancements for further efficiency improvements.

We have installed and commissioned vapor recovery unitsat all our terminals to reduce the hydrocarbon vaporreleased to the atmosphere and recover it as product. Wecontinue to meet government biofuels mandates includingthe provision of biodiesel 5% at all terminals.

Safety and Quality Control


Financing

Quality Workforce

We have multiple sources of funds and maintain a strongliquidity position. As of December 31, 2009, the Company,including its subsidiaries, has total undrawn uncommittedcredit facilities of Baht 66 billion from Thai and foreign banksas well as ExxonMobil affiliates. The Company also receivedan approval from the Securities and Exchange Commission(SEC) to offer for sale Baht 8 billion of short term bills ofexchange in a revolving program to institutional investors,high net worth investors, and the general public. Theprogram has been assigned the short-term national rating ofF-1 (tha) by Fitch Ratings (Thailand) Ltd. and the companyhas obtained rating of A+ by Tris Rating Co., Ltd. The

company started issuing the short term bills of exchange inJanuary 2009.

We also successfully secured Baht 8 billion of committedloans to refinance existing loans due in 2009.

We believe that our capable and dedicated employees areone of the company's greatest strengths. Our employeedevelopment system utilizes integrated processes forensuring the ongoing development of highly productive,dedicated and motivated employees. We are committed tomaintaining a diverse workforce and a supportive workenvironment that is characterized by open communication,trust and fair treatment.

We continue to recruit talented people and are committed toemployee development through work assignments, on-the-job experience, and focused training and education. On-going career planning is a shared responsibility between theCompany and the employee. Our goal is to develop ouremployees to have the highest technical and leadershipcapabilities in the industry. We leverage the ExxonMobilnetwork in providing training to our employees, includingforeign assignments for selected employees to work in otherExxonMobil affiliates. We also have programs to supportfurther education of our employees at company expense.

We place a high priority on employee development. Ourpeople processes and systems are consistent with a long-term career orientation. We promote from within and requireour managers and supervisors to foster an environmentwhere continuous personal and professional growth isencouraged. It is an environment of high expectations thatrecognizes employee contributions and provides rewardsbased on individual and team contributions.


management'sdiscussion and analysis

Income Statement 2009 2008(million Baht)

Sales 162,910 222,234

Profit/(Loss) from sales 6,410 (9,033)

Downstream 5,931 (7,169)

Petrochemical 479 (1,864)

EBITDA 8,417 (7,058)

Interest expenses (542) (1,244)

Income Tax (expense) / credit (1,744) 3,053

Net profit / (loss) 4,451 (6,864)

Adjusted earnings per share* (Baht/share) 1.3 (2.0)

Based on current no. of shares of 3,461 million shares

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Review of consolidated results for 2009

Sales revenue in 2009 dropped about 27% from 2008due to lower average product prices and slightly reducedpetroleum sales volumes. Profit from sales increasedsignificantly from a loss of Baht 9,033 million in 2008 to again of Baht 6,410 million in 2009 as a result of higherrefining and paraxylene margins. Refining marginsincreased from a negative 2.3 dollars per barrel in 2008to 5.6 dollars per barrel in 2009. Paraxylene marginsimproved from a negative 81 dollars per ton in 2008 to116 dollars per ton in 2009, reflecting an improvement inindustry conditions. Selling, administrative and man-agement benefit expenses were at about the same levelin both years.

2009 EBITDA which excludes interests, taxes, depre-ciation and amortization expenses was Baht 8,417million, compared to a loss of Baht 7,058 million in 2008.

Interest expenses decreased by Baht 702 million in2009, due to lower interest rates and a reduction in ouraverage debt balance compared to 2008.

The effective tax rate for 2009 was 28%, while income taxfor 2008 was a net credit due to losses incurred.

Net profit was Baht 4,451 million (1.3 Baht/share) in 2009compared to a net loss of Baht 6,864 million (-2.0 Baht/share) in 2008.


2008 - 2009 Refining Margins

Fluctuations in crude prices often impact refiningmargins due to stock impacts. Generally thesefluctuations create stock gains when crude prices riseand stock losses when crude prices decline.

In 2008, prices increased during the early part of theyear but fell significantly during the second half. Overthe full year, prices were much lower, resulting in stocklosses, reducing refining margins.

In 2009 prices also fluctuated, but generally rose,resulting in stock gains which helped refining margins.

In total, refining margins were much stronger in 2009than 2008, however excluding stock impacts marginswere lower.

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Balance Sheet 2009 2008(million Baht)

Total assets 62,015 55,070

Total liabilities 37,940 34,650

Total shareholders equity 24,075 20,420

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�� Esso (Thailand) Public Company Limited 2009 Annual Report

Total assets increased by Baht 6,945 million in 2009,with current assets higher by Baht 7,938 million partiallyoffset by lower non-current assets of Baht 993 million.Current assets increased primarily due to higher tradereceivables and inventories reflecting higher year-endcrude and product prices. Non-current assets decreaseddue to a reduction in deferred income tax assets as prioryear tax losses were partially utilized. This was partlyoffset by an increase in investing activities, in purchasingproperty, plant and equipment mainly associated withEuro IV standards preparations.

Total liabilities increased by Baht 3,290 million mainlydue to higher accounts payable of Baht 3,060 milliondriven by increased crude prices at year-end 2009compared to year-end 2008. As of year-end, borrowingswere Baht 27,863 million, slightly lower than the prioryear-end balance of Baht 27,971 million. In 2009, wehad Baht 22,363 million of short-term borrowings(including Baht 4,795 million outstanding Bills ofExchange) and Baht 5,500 million in long-term loans. In2008, long-term loans of Baht 8,250 million wereconsidered as current liabilities to satisfy accountingrequirement TAS 1.

Total shareholders' equity increased by Baht 3,655million, reflecting 2009 net profit of Baht 4,451 million,partially offset by an interim dividend payment of Baht865 million (0.25 Baht/share) paid in September.

Cash Flow

Cash Flow 2009 2008(million Baht)

Cash generated from operations 4,521 5,342

- Net cash generated from operating activities (after interest and tax) 3,939 4,056

Cash flow from investment (2,680) (832)

Cash flow from financing (775) (3,827)

Net increase/(decrease) in cash 484 (603)

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Our cash generated from operations was Baht 4,521 million. Net cash used for investments was Baht 2,680 million.Investment expenditures mainly related to capital investments for the early phase of a project at our refinery to producefuels to meet the government Euro IV product specification mandate, the installation of vapor recovery units at ourdistribution terminals, and tank modifications at our service stations. Our cash flow from financing of Baht 775 million wasmainly used to pay interim dividends to shareholders in September 2009. In total, our cash increased by Baht 484 millionin 2009.

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Financial Ratio 2009 2008

Current ratio (times) 0.8 0.5

Quick ratio (times) 0.2 0.1

Total debt to equity ratio (times) 1.2 1.4

Long term debt to equity ratio (times) 0.2 0.0

Net debt to equity ratio (times) 1.1 1.3

Current ratio = Current assets / Current liabilities

Quick ratio = (Cash and cash equivalents + Short term investments

+ Trade receivables) / Current liabilities

Total debt to equity ratio = Total debt / Total shareholders' equity

Long term debt to equity ratio = Non-current borrowings / Total shareholders' equity

Net debt to equity ratio = (Total debt - Cash and cash equivalents) / Total shareholder's equity

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The Company is actively participating in every community where we operate, and striving to make a positivecontribution built on mutual trust and respect. We identify and support programs that benefit rural development,education, art and culture, environmental conservation, health and safety, and the well-being of the Thai people in thesurrounding communities and the country at large.

growing with thais

1. Sustainable Community Development

We are supporting many projects that strengthen local communities and sustain their growth and development. Our contribution

programs focus on infrastructures, skills development and the quality of life of people in communities near our operating

facilities and rural areas around Thailand.

the center’s marketing activities. The Bangsai SUPPORT

Center is one of Her Majesty's many projects to develop

Thai local communities. Its aim is to enhance Thai

heritage activities particularly handicrafts while improving

villagers' income and their quality of life, as well as

conserving Thai art and culture.

Voluntary Engineering Student Camp

For over 20 years, we have supported the rural

development camp organized by engineering students

of Chulalongkorn University. The objective of the camp

is to contribute to rural and social development. In 2009,

the students built the Yuwawissawakorn Borpit 37 Bridge

at Baan Huay Pla Fa, Moo 3, Tambon Na Dee, Amphoe

Dan Sai, Loei, during the summer. Villagers, mostly

farmers, benefit significantly from the bridge which

facilitates traveling in general and the transport of crops

to market in particular.

Developing Skills for Women and Girls Project in Laem

Chabang Area

We supported the Population and Community Development

Association in the Skills Enhancement Center for Women

and Girls Project in the Laem Chabang. Covering 10

communities in Laem Chabang area near our Sriracha

refinery, the project aims to help provide these groups

with skills, resources and supporting facilities to help

improve their economic circumstances, business

management skills and drive positive change in the

communities.

Disseminating Work of Bangsai Arts and Crafts Center

We provide support to the Bangsai Arts and Crafts Center

under the Royal Patronage of Her Majesty the Queen's

Supplementary Occupations and Related Techniques

(SUPPORT) to organize exhibitions of the masterpieceproducts. This exhibition aims to promote and support

Esso (Thailand) Public Company Limited 2009 Annual Report ��

Esso Challenge Innovative Internship

An extensive training program for selected third-year

students from universities around Thailand, the objective

of the Esso Challenge Innovative Internship program is to

provide students with business experience before their

graduation. The program includes classroom training

and real life practice by developing professionalism

with business ethics and skills development in

Information Research and Analysis, Innovative

Thinking, Integrated Marketing Communications and

Leadership.

Promoting Learning by Reading

We produce the quarterly magazine, "Knowledge is

Light," to disseminate knowledge on art and culture,

science and technology, and energy and the

environment. Since its first issue five decades ago, the

magazine has been distributed to libraries, schools,

universities, government offices and to the general

public.

TV Documentary Program

For three decades, we have produced the TV

documentary program, "Knowledge is Light" to

disseminate information about science and technology,

energy, environment, art and culture, including public

interest issues. The program is now broadcasted every

Saturday from 16.05-16.30 hrs. on TV Thai (Thai PBS).

2. Developing Education for Advancement

We realize the significance of education as a means to promote the country's development.

Esso Scholarships

Recognizing the need to promote science andengineering education to help develop the next

generation of scientists and engineers, we established

the Esso-Ratanakosin Bicentennial Fund in 1982. Since

then, the fund has provided more than 1,500 scholar-

ships to students in science and engineering fields from

universities nationwide.

The Esso Sriracha Refinery educational fund was

established in 1999 to support needy students. Since

then, a total of 1,149 scholarships have been awarded. In

2009, 286 scholarships were awareded to 133 primary

school students, 83 secondary school students, and 70

high school students.

Vocational Science Contest

The Company, in cooperation with the Ministry of

Education and the Science Society of Thailand under the

Royal Patronage of His Majesty the King, initiated the

Esso-Vocational Science Contest Program in 1991.

Since then, we have continuously supported the program

to promote scientific learning and innovation by

vocational students nationwide.


3. Health and Safety

We take an interest in projects designed to promote public health and safety. We provided funds for needy patients and

donated medical equipment to local hospitals in remote areas. In addition, we have launched several safety campaigns at

Esso service stations nationwide to increase public awareness of safe practices and behaviors.

Road Safety

In conjunction with the Thai Motorcycle Enterprise

Association (TMEA), the Department of Land Transport

and the Royal Thai Police, the Company joined in the

"Ride Safely, Lights-on and Fasten Anti-Knock Helmet"

safety campaign to support the Government's policy on

promoting public safety awareness. The program,

which includes road safety and traffic rules training and

the distribution of standard anti-knock helmets to

attendees, was launched nationwide. We participated in

the program in Chon Buri, Chaing Mai, Phuket and

Samui Island in 2009.

Providing Safety Helmets for Children in Hippotherapy

Program

We provided anti-knock helmets to the Veterinary and

Remount Department of the Royal Thai Army, for children

attending the Hippotherapy Program, which utilizes

horse riding to help treat autistic children, and children

with other mental or physical disorders.

Helping Friends in Need

We supported the Ao Udom Hospital's Emergency Relief

Team to take care of the communities affected by a

Chemical leakage at Laem Chabang Port in

November.

Speakers Coalition Program

Sharing energy knowledge with the general public is our

approach to help improve understanding of the energy

situation in the country and the world. We have

developed a Speakers Coalition team from selected

employees, including senior executives, technical

experts and engineers. During the year, the Company’s

speakers worked with government agencies, community

organizations, trade associations, and academic

institutes.

Preserving Thai Cultural Heritage

We realize that conserving Thailand's cultural heritage

provides our descendants with an understanding of our

history. We, therefore, support the National Film Archive

of Thailand in preserving films and video records of

historic events.


Youth Leader Camp

We support Khao Kheo Open Zoo's long-term program,

"Youth Leader Camp -- Tiger conserves the forest - Fish

conserves the sea." At the camp, attendees gained agreater appreciation of wild life and environmental

conservation.

Laem Chabang Marine Ecology Study Center

In conjunction with the Laem Chabang Municipality and

the Institute of Marine Science, Burapha University, in

2005, we established the Laem Chabang Marine

Ecology Study Center at Laem Chabang School which is

situated near our refinery. We continue to support a

program which trains students, teachers and villagers

how to monitor the quality of seawater around the area.

The program receives strong support from the local

community.

Supporting Wildlife Conservation

We supported the Freeland Foundation to produce "Sold-

Out" anti-wildlife trafficking banners in seven languages.

The banners were distributed at Royal Thai Customs

checkpoints in many frontier provinces as a part of the

wildlife conservation campaign.

4. Environmental Protection

In addition to our commitment to operating in an environmentally responsible manner everywhere we do business, we

contribute and support several programs to help protect and conserve the environment in communities close to our

operations, as well as in other parts of Thailand.

Supporting Project to Celebrate His Majesty the King's

Birthday Anniversary

The Company continued its support to the Kung Krabaen

Bay Royal Development Study Center, which was

initiated by His Majesty the King to conserve the

environment around the coastal area in Chantaburi. In

2009, we joined in the "Clean Beach, Clean Sea at Kung

Krabaen Bay" activities.

Marine Science Youth Camp

Since 1980, we have supported the Marine Science

Youth Camp, organized by the Marine Conservation

Club of the Faculty of Science, Chulalongkorn University,

to promote marine environmental conservation. In 2009,

the 30th Marine Science Youth Camp was held on

March 16-22 and was attended by selected high school

students from all over Thailand. With the theme, "Share

Our Soul, Save Our Sea," the program consisted of a full

day of classroom lectures at the Faculty of Science, and a

field trip and marine study activities Around the coral reef

at Koh Pla Muek and Tien beach in Koh Samae San,

Amphoe Sattahip, Chon Buri.


5. Employee Volunteerism

We encourage our employees to contribute to the society through a variety of activities.

Donating School Kits

The Esso employee club donated scholarships, books,

stationery, fax machine and drinking water cooler tanks,

to students of Wattamnak School in Nakhon Nayok

province.

Giving Computers, ICT System to Rural School

Management and employees presented computers,

internet access equipment and provided scholarships to

Baan Sub Tai School in Nakhon Ratchasima province.

Donating Scholarships and Musical Instruments

The Esso employee club gave scholarships and musical

instruments to students of Phothiwittayalai College,

Amphoe Muang, Nakhon Nayok.

Teaching Volunteers at Esso Sriracha Refinery

Employees at Esso Sriracha Refinery have volunteered

to teach English to Mathayom 1 students of Wat Laem

Chabang School every Thursday since 2002. In 2009, 28

refinery employees joined this program. The teaching

volunteers created a friendly learning atmosphere,

resulting in highly enjoyable and productive classes for

students.


2009 Highlights:

Thailand Corporate Social Responsibility - GWIMEmpowering Women Network for a Change

A comprehensive training and coaching program sponsored by Exxon MobilCorporation, the Global Women in Management (GWIM) Program aims atstrengthening the management skills and leadership abilities of womenmanagers who are working in community organizations. The program bolsterstheir abilities to create positive and sustainable changes to their home communitiesand to the nation. We started recruiting Thai female managers of NGOs to attendthe GWIM program in the USA in 2005.

To fulfill the program's objective, we initiated support for social developmentactivities for three non-government organizations; the Population And CommunityDevelopment Association (PDA), The Life Improvement Foundation for Childrenand Youth, and The Human Development Foundation (HDF Mercy Centre),whose female personnel had gone through the GWIM program. The threeactivities are as follows:

Mercy Farm Development Project by the HDF Mercy Centre

Happy Family Project by the Life Improvement Foundation for Childrenand Youth

Youth & Women Professional Training at Ban Poo Muang,Ratchaburi by the PDA


report of the audit committeeshareholding and management structurecorporate governanceinternal controlsrelated party transactions


report ofthe audit committeeThe Audit Committee comprises of three independent directors namely Mr. Sompop Amatayakul, Mr. Smit Tiemprasert andMs. Wattanee Phanachet, performed the duties as assigned by the Board and in compliance with the Audit CommitteeCharter. The Committee reviewed the matters related to the financial reporting, information disclosure, adequacy of internalcontrol, risk management and provided corrective actions. In 2009, the Committee convened five meetings in which everycommittee members attended, together with the Company's management, internal control manager and external auditors. Inaddition, the Committee held two separate meetings to discuss singly with internal legal counselors and external auditors.The Committee reported the activities, internal audit findings and Committee's recommendations to the Board of Directors ona quarterly basis. In summary, the Audit Committee's activities included the following key subjects:

The Committee reviewed the quarterly and annual financial statements, financial information disclosures and accountingpolicies with external auditors and the Company's management. The Committee concluded that the financial statementswere prepared in accordance with generally accepted accounting principles, timely and adequately disclosedinformation and in compliance with related rules and regulations. The Committee also reviewed the results of externalauditor's assessment, there were no significant adjustments made by the external auditors.

The Committee reviewed and concurred with the annual plan of internal audit, assessed the adequacy of theCompany's internal control, risk management processes and reviewed key findings from the internal audit assessment.The Committee also reviewed the effectiveness of management processes in monitoring and following up on keyissues and corrective actions as recommended by the internal auditors or the Committee. Theresults of assessment indicated that the Company's internal control and risk managementsystems are adequate, appropriate and consistent with the assessment of externalauditors.

The Committee reviewed the processes of compliance monitoring on laws andregulations applicable to the business of the Company and satisfied with the mechanismand processes in place to ensure the compliances.

The Committee reviewed the appropriateness and reasonableness of related-partytransactions and concluded that the business transactions were conducted on normalcourse of business terms and conditions at arms' length and were disclosed asappropriate.

The Committee reviewed the Company's Code of Conduct which could be construedthat the Company business practices are ethically conducted and consistent withthe principles of good corporate governance of the Stock Exchange of Thailand.

The Committee participated in screening and reviewing the qualifications andremunerations of candidates for external auditors and informed consent tothe Board of Directors to propose the external auditors for approval at theAnnual Shareholders' General Meeting.

Mr. Sompop Amatayakul

Chairman of Audit Committee



shareholding andmanagement structure

1. Shareholders

The top 10 major shareholders registered in the share register book as of September 16, 2009 (closing date for interimdividend payment) were as follows:

Shareholders * Number of Shares Shareholding (%)

1. ExxonMobil International Holdings Inc. 2,264,500,000 65.432. Ministry of Finance 253,750,000 7.333. RBC Dexia Investor Services Bank S.A. 30,100,900 0.874. Brown Brothers Harriman & Co-Oppenheimer 28,037,800 0.81

Quest International Value Fund, Inc.5. Duetsche Bank AG, London Prime Brokerage 25,591,200 0.746. Littledown Nominees Limited 9 25,502,700 0.747. American International Assurance Company Limited - APEX 24,000,000 0.698. American International Assurance Company Limited - TIGER 19,000,000 0.559. The BNY Nominees Ltd A/C Bank of New York Europe Ltd - 15,893,700 0.46

Direct Clients Account-CGT Exempt10. Somers (U.K.) Limited 14,000,000 0.40

Total 2,700,376,300 78.02

* Excluding 52,033,693 shares (1.50%) under Thai NVDR Co., Ltd.

2. Dividend Policy

Our Board of Directors may recommend annual dividends, subject to the approval of the Company's shareholders. OurBoard of Directors may by resolution decide to pay to our shareholders such interim dividends as appear to the directors to bejustified by our profits. Distribution of an interim dividend must be reported to the shareholders at the next general meeting ofshareholders following the meeting of our Board of Directors approving the interim dividend.

It is the current policy of our Board of Directors to recommend to our shareholders a dividend of not less than 40% of netprofits after deduction of all specified reserves, subject to our investment plans, applicable laws, contingencies and otherrelevant considerations. The actual dividend payout ratio may vary above or below the level indicated in our dividend policyand is subject to the risks outlined in our regulatory filings.

3. Board of Directors

Our Articles of Association provide that the Board of Directors (the "Board") will comprise at least five directors not less thanhalf of whom are required to reside in Thailand. In addition, one-third or the number of directors closest to one-third if thenumber of directors is not a multiple of three, of the Board is required to retire at each annual general meeting of shareholders.Retiring directors are eligible for re-election.

The Board consists of qualified persons with relevant experience. Currently, the Board has 12 members with 4 independentdirectors.


Our Board of Directors serving in 2009 comprised of:

Name Position

1. Mr. Robert Michael Cooper (1) Chairman

2. Ms. Porntida Boonsa Director

3. Mr. Mark Ell Northcutt Director

4. Mr. Mongkolnimit Auacherdkul (3) Director and Member of Performance Evaluation Committee

5. Mr. Kwok Yew Meng Director

6. Mr. Adisak Jangkamolkulchai Director

7. Mr. Somjate Saifon Director

8. Mr. Kurujit Nakornthap Independent Director

9. Mr. Wattana Chantarasorn (3) Director and Member of Performance Evaluation Committee

10. Mr. Sompop Amatayakul (2) Independent Director and Chairman of Audit Committee

11. Mr. Smit Tiemprasert (2), (3) Independent Director, Chairman of Performance EvaluationCommittee and Member of Audit Committee

12. Ms. Wattanee Phanachet (2) Independent Director and Member of Audit Committee

Mr. Rene Gonzalez and Ms. Angsna Pirentorn are the Company’s secretaries

(1) Mr. Robert Michael Cooper was appointed director and chairman of the Board to replace Mr. Daniel E. Lyonswith effect from September 1, 2009

(2) Mr. Sompop Amatayakul, Mr. Smit Tiemprasert and Ms. Wattanee Phanachet were re-appointed as AuditCommittee members and their term was extended for a further 2 years term with effect from October 19,2009

(3) Mr. Mongkolnimit Auacherdkul, Mr. Wattana Chantarasorn and Mr. Smit Tiemprasert were re-appointed asPerformance Evaluation Committee members and their term was extended for a further 2 years term witheffect from November 29, 2009

Scope of Duties and Responsibilities of the Board

The Board of Directors has full powers and authority toconduct the Company's business in accordance with theCompany's policies, objectives, Articles of Association,board and shareholder resolutions and applicable laws.The Board also has duties and responsibilities prescribed inapplicable laws. The Board appreciates the importance ofgood corporate governance, and believes in the followingprinciples:

1. Commitment to the creation of added value to thebusiness in the long run, and management of thebusiness with prudence and by avoiding of conflictsof interest;

2. Operation of business in a transparent way withadequate disclosure to relevant parties;

3. Operation of business based on appropriate riskcontrol and management systems;

4. Implementation of appropriate Standards of BusinessConduct applicable to the Company's directors,officers and employees.

The Board will issue a directors' report on the activities of theCompany and its financial performance for review by theshareholders' meeting.

Board Appointment

The appointment, removal or resignation of directors isprescribed in our Articles of Association which can besummarized as follows:

1. The Board shall consist of at least five directors andnot less than half of the directors are required toreside in Thailand.

2. The shareholders' meeting shall appoint directors inaccordance with the following principles and proce-dures:

i. In the election of each director, each shareholderwill have vote(s) equal to the number of shares(s)held by him.

ii. Each shareholder may vote all of his shares in theexercise of the right he has under (i) to elect eachof candidates of his choice as a director but hecannot split his shares and cast his split votes infavor of two or more candidates to one director-ship.

iii. Nominees who receive the largest number ofvotes in descending order from the highest to thelowest number of votes received will be elected


until all director positions required at such timeare filled. In the event of nominees receivingequal votes and exceeding the number ofvacancies to be filled, the chairman of the meetingshall have a casting vote, or, in case the chairmanis not the Company's shareholder, the decisionshall be made by drawing lot.

3. At each annual general meeting of shareholders,one-third or the number of directors closest to one-third, of the Board is required to retire. Retiringdirectors are eligible for re-election.

4. Any director who decides to resign must submit aletter of resignation to the Company. The resignationshall be effective on the date the Company receivesthe letter.

5. Removal of a director before the end of term shallrequire a resolution of shareholders passed by notless than three-fourths of the total votes of share-holders and proxies (if any) attending the meetingand eligible to vote and not less than one-half of thetotal number of shares held by shareholders andproxies (if any) attending the meeting and eligible tovote.

Independent Directors

In addition to the qualification described in item 7 (Nominationof Directors and Executives), independent directors meet thefollowing qualifications pursuant to the regulation of theSecurities and Exchange Commission and Stock Exchangeof Thailand:

1. Not hold shares exceeding 1% of the total number ofvoting rights of the Company, its parent company, itssubsidiaries, affiliates, major shareholder orcontrolling person, including the shares held byrelated persons of the independent director;

2. Not be nor have been an executive officer, employee,staff, salaried consultant or a controlling person of theCompany, its parent company, its subsidiaries,affiliates, same-level subsidiaries, major shareholderor controlling person unless foregoing status hasended not less than two years prior to the date ofappointment except where the independentdirector(s) was the government officer or consultantof the government agency which is the majorshareholders or a controlling person of the Company;

3. Not be a person related by blood or registrationunder laws, such as father, mother, spouse, siblingand child, including spouse of the children, executivesor majority shareholders or controlling persons orpersons to be nominated as executive or controllingpersons of the Company or its subsidiaries;

4. Not have business relationship with the Company, itsparent company, its subsidiaries, affiliates, majorshareholder or controlling person which may

interfere with his independent judgment and neitherbeing nor having been a significant shareholder orcontrolling person of any person having businessrelationship with the Company, its parent company,its subsidiaries, affiliates, major shareholder orcontrolling person unless the foregoing relationshiphas ended not less than two years prior to the date ofappointment.

The term "business relationship" includes the normalbusiness transaction, rent or lease of immovableproperty, transactions related to assets or services orgranting or receipt of financial assistance throughreceiving or extending loans, guarantee, providingassets as collateral, and any other similar actionswhich result in the Company or its counterparty beingsubject to indebtedness payable to the other partyamounting to three (3) percent or more of the nettangible assets of the Company or Baht twenty (20)million whichever is lower. The value of the businessrelationship shall be calculated according to themethod stipulated by the Capital Market SupervisoryBoard governing rules on connected transaction mutatismutandis. The consideration of such indebtednessshall include indebtedness occurred during theperiod of one year prior to the date on which thebusiness relationship with the person commences;

5. Neither be nor have been an auditor of the Company,its parent company, its subsidiaries, affiliates, majorshareholder or controlling person, and not being asignificant shareholder, controlling person, or partnerof an audit firm which employs auditors of the Company,its parent company, its subsidiaries, affiliates, majorshareholder or controlling person unless the foregoingrelationship has ended not less than two years prior tothe date of appointment;

6. Neither be nor have been any professional advisorincluding legal advisor or financial advisor whoreceives an annual service fee exceeding two millionBaht from the Company, its parent company, itssubsidiaries, affiliates or major shareholder orcontrolling person, and neither being nor havingbeen a significant shareholder, controlling person,executive or partner of the professional advisorunless the foregoing relationship has ended not lessthan two years prior to the date of appointment;

7. Not be a director who has been appointed asrepresentative of the Company's director, majorshareholder or shareholders who are related to theCompany's major shareholder;

8. Not operate the business of the same nature as andin significantly competition with the Company orsubsidiaries nor be the partnership or executive,director, employee, staff, salaried consultant or holdshare exceeding 1% of the total number of votingrights of the other companies operating the businessof the same nature as and in competition with theCompany or subsidiaries; and

9. Not have any characteristics which make himincapable of expressing independent opinions withregard to the Company's business affairs.


4. Audit Committee

Our Audit Committee which was appointed at the Board of Directors' or a shareholders' meeting (as the case may be)comprises solely of independent directors who meet the qualifications set out in regulation of the Securities and ExchangeCommission and Stock Exchange of Thailand. The Chairman and members of our Audit Committee hold office for a term oftwo years.

Our Audit Committee members listed below were re-appointed for another 2 years term at the Board of Directors' meeting witheffect from October 19, 2009:

Name Position

1. Mr. Sompop Amatayakul Independent Director / Chairman

2. Mr. Smit Tiemprasert Independent Director / Member

3. Ms. Wattanee Phanachet Independent Director / Member(with accounting and finance background)

Mr. Chai Jangsirikul is Audit Committee secretary, Mr. Amporn Chanyangam is Audit Committee Coordinator

Audit Committee Responsibilities

The scope of duties and responsibilities of the Audit Commit-tee are as follows:

1. to review the Company's financial reporting processto ensure accuracy and adequacy;

2. to ensure that the Company has a suitable andefficient internal control system and an internal auditsystem, to determine an internal audit unit's indepen-dence, as well as to approve the appointment,transfer and dismissal of the chief of an internal auditunit or any other unit in charge of an internal audit;

3. to review the performance of the Company to ensurecompliance with the securities and exchange law,regulations of the Stock Exchange of Thailand andlaws relating to the business of the Company;

4. to consider, select, nominate and recommendremuneration of the Company's external auditors aswell as to attend non-management meeting with anexternal auditor at least once a year;

5. to review a connected transactions or transaction thatmay lead to conflict of interest so as to ensure thatthey are in compliance with laws and the Exchange'sregulations, and are reasonable and for the highestbenefit of the Company;

6. to prepare a report on monitoring activities of theAudit Committee and disclose it in the annual reportof the Company, and have such report signed by theChairman of the Audit Committee provided that itshall consist of at least the following information:

(a) an opinion on the reliability, completeness andcreditability of the Company's financial report,

(b) an opinion on the adequacy on the Company'sinternal control system,

(c) an opinion on the Company's compliance with thelaws on securities and exchange, the Exchange'sregulations, and the laws relating to theCompany's business,

(d) an opinion on the suitability of the nominatedexternal auditors,

(e) an opinion on transactions that may lead toconflicts of interests, if any,

(f) the number of audit committee meetings, and theattendance at such meetings by each committeemember,

(g) an opinion or general comment observed by theaudit committee from its performance of duties inaccordance with the charger, and

(h) other transactions, within the scope of duties andresponsibilities assigned by the Board, which,according to the audit committee's opinion, shouldbe disclosed to the shareholders and generalinvestors;

7. to perform any other task assigned by the Board withthe approval of the Audit Committee;

8. to report to the Board for rectification within the periodthat the Audit Committee thinks fit if the AuditCommittee found or suspected that there is atransaction or any of the following acts which maymaterially or significantly affect the Company'sfinancial condition and operating results;

(a) a transaction which cause a conflict of interest;


6. Executive Officers

Our executive officers as of December 31, 2009 were:

Name Position

1. Mr. Robert Michael Cooper (1) Chairman and Managing Director

2. Mr. Mark Ell Northcutt Director and Refinery Manager

3. Mr. Mongkolnimit Auacherdkul Director and Public and Government Affairs Manager

4. Mr. Kwok Yew Meng Director and Retail Manager

5. Mr. Adisak Jangkamolkulchai Director and Refinery Process Manager

6. Mr. Somjate Saifon Director and Chemicals Manager

7. Mr. Channarong Janjitmun Industrial and Wholesale Manager

8. Mr. Chai Jangsirikul Controller

9. Ms. Ratrimani Pasiphol Treasurer / Tax Manager

10. Mr. Zarko Pavlovic (2) Lubricants Manager

11. Ms. Phantipa Rasananda Investor Relations Manager

(1) Mr. Robert Michael Cooper was appointed to replace Mr. Daniel E. Lyons with effect from September 1, 2009

(2) Mr. Zarko Pavlovic replaced by Ms. Jo-Anne Eu Chu Chuin effective on January 1, 2010

(b) any fraud, irregularity, or material defect in aninternal control system; or

(c) an infringement of the law on securities andexchange, the Exchange's regulations, or any lawrelating to the Company's business,

9. to review without delay upon receiving a writtennotification from the external auditor of the discoveryof any suspicious circumstance that the director,

5. Performance Evaluation Committee

Our Performance Evaluation Committee was appointed at the Board of Directors' meeting. The Chairman and members ofour Performance Evaluation Committee will hold office for a term of two years subject to them retaining their position asdirectors of the Company. Our Performance Evaluation Committee members listed below were re-appointed for another 2years term at the Board of Directors' meeting with effect from November 29, 2009:

Name Position

1. Mr. Smit Tiemprasert Independent Director / Chairman

2. Mr. Wattana Chantarasorn Director / Member

3. Mr. Mongkolnimit Auacherdkul Director / Member

Performance Evaluation Committee Responsibilities

The scope of duties and responsibilities of the PerformanceEvaluation Committee is to develop Key PerformanceIndicators (KPI) for performance evaluation of our Managing

manager or any person responsible for the Companycommits an offence as prescribed by the relevantSecurities and Exchange regulations and to reportany finding confirming the suspicion of the externalauditor, to the Board and to request the Board todisclose such finding to the Office of the Securitiesand Exchange Commission and/or the externalauditor or to the Office of the Securities and ExchangeCommission and/or the external auditor as requiredby the Securities and Exchange Act within thirty days.

Director, to review our Managing Director's performancebased on such KPI's with the Board, and to provide feedbackto the Managing Director's home affiliate regarding suchperformance during the regular performance appraisal cycleof the Managing Director.


Managing Director's Responsibilities

Managing Director has full power to manage the affairs ofthe Company in accordance with its policies, objectives,Articles of Association, Board and Shareholders' resolutions,and applicable laws provided that the Managing Directormay not exercise such powers if he/she may have a conflictof interest in any manner with the Company, in exercisingsuch powers.

If the Managing Director delegates powers to a person, suchperson shall have the authority to exercise such powers onthe Managing Director's behalf, provided that such personmay not exercise such powers if he/she may have a conflictof interest in any manner with the Company, in exercisingsuch powers.

7. Nomination of Directors and Executives

In the event a director vacancy arises or in the event of an additional director is to be appointed, the remaining directors willdiscuss to nominate a qualified director with relevant knowledge, experience and skill to fill the vacancy. An appointeddirector or executive must have all the qualifications set out in Section 68 of the Public Limited Companies Act B.E. 2535 (andas amended) and the Securities and Exchange Commission Procedure no. Tor Jor 24/2552, "The Qualification of Director andExecutive of Listed Company" (and as amended). For directors retiring by normal rotation or for election of new directors, afterthe Board has approved the list of director nominees, the Board will propose the list of nominees at a general meeting ofshareholders in accordance with the voting procedure described under item 3 (Board of Directors).

The following remuneration was paid to directors in 2009:

Name Fiscal year ended December 31, 2009 (Baht)

1. Mr. Robert Michael Cooper (1) -2. Ms. Porntida Boonsa (1) -3. Mr. Mark Ell Northcutt (1) -4. Mr. Mongkolnimit Auacherdkul (1) -5. Mr. Kwok Yew Meng (1) -6. Mr. Adisak Jangkamolkulchai (1) -7. Mr. Somjate Saifon (1) -8. Mr. Kurujit Nakornthap 1,600,0089. Mr. Wattana Chantarasorn 1,466,67410. Mr. Sompop Amatayakul 2,000,00411. Mr. Smit Tiemprasert 2,000,00412. Ms. Wattanee Phanachet 2,000,004

Directors resigning during 2009

1. Mr. Daniel E. Lyons (1) -

Total 9,066,694

(1) Not eligible for director remuneration as they receive separate compensation from the Company or itsaffiliates for full-time services rendered.

8. Remuneration of Directors and Executives

1. Directors who also are members of the Audit Commit-tee will receive a monthly remuneration of 166,667Baht.

2. Directors who are not member of the Audit Committeewill receive a monthly remuneration of 133,334 Baht.

3. Notwithstanding item (1) and (2), directors whoreceive separate compensation from the Company orits affiliates for any type of full-time service renderedare not eligible for remuneration as directors.

Directors Remuneration

The remuneration of directors who are not receivingseparate compensation from the Company, or its affiliates forany type of full-time service is comparable to those paid byother companies, and is as follows:


Executives Remuneration

For the fiscal year ended December 31, 2009, the totalexecutive remuneration for 13 executives (including the 2executives resigned in 2009), which includes salaries,

9. Management Structure

The management structure of the Company, its subsidiaries, and associated companies as of December 31, 2009 is asfollows:

Name Company Subsidiaries/Associated Company

1 2 3 4 5 6

1. Mr. Robert Michael Cooper * x, /, // x, /

2. Ms. Porntida Boonsa * /

3. Mr. Mark Ell Northcutt * /, //

4. Mr. Mongkolnimit Auacherdkul * /, //

5. Mr. Kwok Yew Meng * /, // x, / x, / x, /

6. Mr. Adisak Jangkamolkulchai * /, //

7. Mr. Somjate Saifon * /, //

8. Mr. Kurujit Nakornthap /

9. Mr. Wattana Chantarasorn /

10. Mr. Sompop Amatayakul /

11. Mr. Smit Tiemprasert /

12. Ms. Wattanee Phanachet /

13. Mr. Channarong Janjitmun //

14. Mr. Chai Jangsirikul //

15. Ms. Ratrimani Pasiphol //

16. Mr. Zarko Pavlovic //

17. Ms. Phantipa Rasananda //

x = Chairman / = Director // = Executive Officer * = Authorized Director

1. Mobil Enterprises (Thailand) Limited

2. Industry Promotion Enterprises Limited

3. United Industry Development Company Limited

4. Pacesetter Enterprise Limited

5. Thai C-Center Company Limited

6. Thai Petroleum Pipeline Company Limited

wages, benefits, and pension benefits, to the extent bornedby the Company, was Baht 161.7 Million.

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10. Shareholding of Directors and Executives*

Shareholding of directors and executives as of December 31, 2009 is as follows:

Unit : % shares

Name Company Subsidiaries/Affiliates

1 2 3 4 5

1. Mr. Robert Michael Cooper - - - - - -

2. Ms. Porntida Boonsa - 0.003 - - - -

3. Mr. Mark Ell Northcutt - - - - - -

4. Mr. Mongkolnimit Auacherdkul - - - - - -

5. Mr. Kwok Yew Meng - - - - - -

6. Mr. Adisak Jangkamolkulchai - - - - - -

7. Mr. Somjate Saifon - - - - - -

8. Mr. Kurujit Nakornthap - - - - - -

9. Mr. Wattana Chantarasorn - - - - - -

10. Mr. Sompop Amatayakul 0.0001 - - - - -

11. Mr. Smit Tiemprasert - - - - - -

12. Ms. Wattanee Phanachet - - - - - -

13. Mr. Channarong Janjitmun - - 7.00 - - -

14. Mr. Chai Jangsirikul - - - - - -

15. Ms. Ratrimani Pasiphol 0.0003 0.003 - - - -

16. Mr. Zarko Pavlovic - - - - - -

17. Ms. Phantipa Rasananda - - - - - -

* Including shareholding of spouse and minor child.

Remark : Some of the employee directors and executives are on loan assignments from Exxon Mobil Corporation or its affiliates. Pursuant tothe programs of such companies, these directors and executives may own shares of Exxon Mobil Corporation stock through employeesavings or other plans sponsored by such companies.

1. Mobil Enterprises (Thailand) Limited

2. Industry Promotion Enterprises Limited

3. United Industry Development Company Limited

4. Pacesetter Enterprise Limited

5. Thai C-Center Company Limited

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corporate governance

The Company believes that the methods we employ to achieve our results are as important as the results themselves. Ourdirectors, officers, and employees are expected to observe the highest standards of integrity in the conduct of the Company'sbusiness and must comply with our Standards of Business Conduct. In addition, our corporate governance practices reflectthe principles prescribed by the Stock Exchange of Thailand.

1. Standards of Business Conduct

The Company has long established "Standards of Business Conduct" consisting of various policies and guidelines that applyto our officers and employees. Officers and employees are expected to review these policies annually, and to provide writtenconfirmation of compliance. Formal "Business Practice Review" training sessions are conducted periodically for all employeesto bring about a greater understanding of these standards. In addition, separate periodic training sessions are held onspecific policies.

Our Standards of Business Conduct contain 16 foundation policies as follows:

1. Ethics Policy

2. Conflicts of Interest Policy

3. Corporate Assets Policy

4. Directorship Policy

5. Gifts and Entertainment Policy

6. Political Activities Policy

7. International Operations Policy

8. Antitrust Policy

9. Health Policy

10. Environment Policy

11. Safety Policy

12. Product Safety Policy

13. Customer Relations and Product Quality Policy

14. Alcohol and Drug Use Policy

15. Equal Employment Opportunity Policy

16. Harassment in the Workplaces Policy


2. Corporate Governance Practices

The Company generally observes the principles of good corporate governance encouraged by the Stock Exchange ofThailand as follows:

2.1 Rights of Shareholders

The Company recognizes the rights of shareholders, including the right to freely buy, sell or transfer shares, to participatein, express opinions, raise questions, propose agenda items for the annual general meeting, nominate directors, and voteat general meetings of shareholders regarding the Company's performance review, election or removal of directors,directors' remuneration, appointment of external auditors, auditor's fee, declaration of final dividends, amendments to theMemorandum and Articles of Association, capital increases or decreases and the approval of extraordinary transactionsrequiring shareholder approval. General meetings of shareholders will be attended by relevant knowledgeableexecutives to answer questions.

Shareholders will be provided adequate information, including relevant opinions of the directors, regarding issuespresented for voting at general meetings of shareholders in a timely manner to enable shareholders to exercise theirvoting rights effectively.

2.2 Equitable Treatment of Shareholders

It is the Company's policy that directors, officers, andemployees are expected to avoid any actual or apparentconflict between their own personal interests and theinterests of the Company. Our directors, officers, andemployees are expected to avoid securities transactionsbased on material, nonpublic information learnedthrough their positions with the Company. In relation tomisuse of insider information, the Company hasundertaken the following:

Educate the Company's executives regarding theirresponsibilities to report holdings of the Company'sshares, and the penalties for non-disclosure underthe Securities and Exchange Act B.E. 2535 and SETregulations;

Advise the Company's executives to report changesin such holdings of the Company's shares to the SECin accordance with the Securities and Exchange ActB.E. 2535;

Counsel the Company's executives on the sensitivitiesassociated with the use of Company's informationwhich has a bearing on the Company's share price.One month prior to release of the Company's financialstatements, the Company advises relevant employeesnot to disclose any material information prior todisclosure to the SET and the board of directors;

The Company's directors, executives, employees,officers, including their respective spouses anddependents, are prohibited from using the Company'sinformation to sell, buy, transfer or receive anytransfer of the Company's shares before suchinformation is disclosed to the public. Any such usemay violate applicable laws and subject the offendingemployee to disciplinary action by the Company.

2.3 Role of Stakeholders

The Company realizes the importance of the legal rightsof various groups of stakeholders. We strive to providecommunication channels for stakeholders to communicatetheir concerns in regard to irregularities, incorrectfinancial reporting, insufficient internal controls orunethical practices.

We recognize the importance of the communities andenvironment in which we operate. We have a policy tocomply with all applicable laws, rules, and regulations,and respect local and national cultures. Above all otherobjectives, we are dedicated to running safe andenvironmentally responsible operations.

2.4 Disclosure and Transparency

The Company expects compliance with its standards ofintegrity throughout the organization and will not tolerateemployees who achieve results by violating the laws orthe Company's policies. All transactions will beaccurately reflected in its books and records. Thefalsification of books and records and the creation ormaintenance of any off-the-record bank accounts arestrictly prohibited.


In 2009, the Board met 5 times with details of attendance as follows:

Name Board Meeting Attendance (time)

1. Mr. Robert Michael Cooper (1) 1/1

2. Ms. Porntida Boonsa 5/5

3. Mr. Mark Ell Northcutt 4/5

4. Mr. Mongkolnimit Auacherdkul 4/5

5. Mr. Kwok Yew Meng 5/5

6. Mr. Adisak Jangkamolkulchai 4/5

7. Mr. Somjate Saifon 5/5

8. Mr. Kurujit Nakornthap 5/5

9. Mr. Wattana Chantarasorn 5/5

10. Mr. Sompop Amatayakul 4/5

11. Mr. Smit Tiemprasert 5/5

12. Ms. Wattanee Phanachet 5/5

Directors resigning during 2009

1. Mr. Daniel E. Lyons (1) 4/4

(1) Mr. Robert Michael Cooper was appointed director to replace Mr. Daniel E. Lyons with effectfrom September 1, 2009.

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It is the Company's policy to make full, fair, accurate,timely and understandable disclosure in reports anddocuments that the Company files with the authorities,and in other public communications. Relevant informationwill be disclosed to shareholders in accordance withapplicable laws. In 2009, the Company disclosed 9essential matters as required by relevant rules andregulations through the Stock Exchange of Thailand'schannel in a timely manner. Financial reports andrelevant information are also posted on the company'swebsite (www.esso.co.th).

Moreover, the Company has set up an Investor Relationsfunction as a focal point to conduct investor relationsactivities and to ensure effective communication withinvestors and securities analysts. Various communicationchannels are available via the Company website,quarterly analyst meetings, company visits, e-mails, andtelephone calls. Direct IR phone line (02 262-4788) ande-mail ([email protected]) were provided forcontact convenience.

2.5 Board Responsibilities

Board Structure and Responsibilities

See Board of Directors structure and its responsibili-ties, and list of the directors serving the Board in 2009in chapter Shareholding and Management Structureunder item 3 (Board of Directors).

Board Meetings

Under our Articles of Association, the Board normallymeets once every three months. However, additionalmeetings may be scheduled as required.

The minutes of key items are documented andpresented for approval at subsequent Board meetings,and retained for inspection by relevant persons.

Independent directors may meet as necessary amongthemselves without the management team to discusstheir concerns about management issues. Theoutcome is to be relayed to the Board.


Audit Committee

See the Audit Committee charter and its responsibilities, and list of members in the chapter Shareholding andManagement Structure under item 4 (Audit Committee).

In 2009, the Audit Committee met 5 times with details of attendance as follows:

Name Audit Committee Attendance (time)

1. Mr. Sompop Amatayakul 5/5

2. Mr. Smit Tiemprasert 5/5

3. Ms. Wattanee Phanachet 5/5

In addition, the Audit Committee held 2 separate meetings to discuss singly with internal legal counselors and externalauditors.

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Performance Evaluation Committee

See the Performance Evaluation Committee charterand its responsibilities, and list of members in chapterShareholding and Management Structure under item5 (Performance Evaluation Committee).

The Performance Evaluation Committee will assessour Managing Director's performance for 2009 basedon Key Performance Indicators established and willreview the assessment with the Board, and providefeedback to our Managing Director.

Director Remuneration

Details of remuneration paid to directors is disclosedin chapter Shareholding and Management Structureunder item 8 (Remuneration of Directors andExecutives).

Executive Remuneration

Total remuneration paid to executives is disclosed inchapter Shareholding and Management Structureunder item 8 (Remuneration of Directors andExecutives).

Director Development

It is expected that directors will remain well informedregarding current aspects of the Company'soperations, and developments, and best practices incorporate governance. In that regard, the Boardconsiders it desirable that directors participate incontinuing education opportunities in relevantavailable training programs inside and outside theCompany, such as the programs offered by the ThaiInstitute of Directors Association (IOD).


Directors who have completed training courses by the IOD can be summarized as follows:

Name Course Date of Attendance

1. Mr. Robert Michael Cooper - *

2. Ms. Porntida Boonsa DAP 26 Sep 2008

3. Mr. Mark Ell Northcutt - -**/*

4. Mr. Mongkolnimit Auacherdkul DAP 26 Sep 2008

5. Mr. Kwok Yew Meng - -**/*

6. Mr. Adisak Jangkamolkulchai DAP 7 Nov 2008

7. Mr. Somjate Saifon DAP 26 Sep 2008

8. Mr. Kurujit Nakornthap DAP 20 Jul 2007

9. Mr. Wattana Chantarasorn DAP 27 Mar 2009

10. Mr. Sompop Amatayakul DAP 26 Sep 2008

11. Mr. Smit Tiemprasert DCP Jan - Mar 2006

FN 2005

12. Ms. Wattanee Phanachet DCP 12 Mar - 16 Aug 2002

DCP Refresher 25 Feb 2007

ACP 14 - 15 Feb 2007

* Planning to enroll in DAP English class in 2010

** DAP English class previously enrolled was cancelled.

DAP = Director Accreditation Program

DCP = Director Certification Program

ACP = Audit Committee Program

FN = Finance for Non-Finance Director

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internal controls

The Audit Committee independently assesses and evaluates the effectiveness of the Company internal control systems toensure that they are in compliance with good corporate governance. The Audit Committee has performed an assessment ofthe effectiveness of our system of internal controls including a review of all internal audit findings and recommendations.Based on the Audit Committee's assessment, the Board has concluded that our internal control systems are suitable andadequate, and are functioning consistent with the good corporate governance aspects described below.

Organization and Control Environment

The Company believes the existing organizationstructure is appropriate and effective in operating theCompany's business. It is the Company's policy thatdirectors, officers, and employees are expected toobserve the highest code of ethics and avoid any actualor apparent conflict between their own personal interestsand the interests of the Company. They are alsoexpected to deal fairly with each other and with thecompany's supplies, customers, competitors, and otherthird parties.

Risk Management

The Company applies risk assessment and managementpractices in all aspects of our business. The Companyhas processes in place in analyzing and assessing thesignificance of potential risk and in determiningmitigation measures to reduce risk to the extent feasible.The risk management plans - embedded as an integralpart of the business processes, are developed, withconsideration of internal and external risk factors, andincluding follow-up processes to ensure effectiveimplementation.

Management Control

The Company has adopted a Delegation of AuthorityGuide which summarizes the responsibilities andauthorities which form the overall framework for ensuringthat business arrangements and transactions areendorsed and reviewed at an appropriate level. Bydelegating authority, management ensures that decisionswill be made by individuals with the required skills andknowledge. A basic premise is that a delegated authoritybears with it the obligation to exercise good businessjudgment and due diligence as well as effectivesegregation of duties.

Information and Communication

Meeting agendas and supporting information areprovided to board members in a timely fashion to ensurethat material information are available to the peopleresponsible for making relevant decisions. Minutes ofthe Board's meetings including relevant comments ofboard members are properly documented for potentialsubsequent review. All accounting and supportingdocuments are effectively retained under the Company'sInformation Management System (IMS).

Monitoring and Evaluation

Control training is identified and provided to all employeesconsistent with job requirements. Internal audit staffindependently assesses compliance with policies andprocedures, and evaluates the effectiveness of all controlsystems relating to the business. Control weaknesses,irregularities, and business practice issues are promptlyaddressed and reported to management and reviewedby the Audit Committee. Corrective actions, in accordancewith internal audit findings and recommendations, aremonitored by the management of each business unit untilthe issues are resolved. The Audit Committee periodicallyreview and assess the effectiveness of the managementfollow up process.


Internal Control System

The Company realizes the importance of an effective internal control system at all levels. In this regard, extensive internalcontrols and procedures, including those set out in our System of Management Control (SMC) - Basic Standards and ControlsIntegrity Management System (CIMS) are fully established.

The internal control system, including compliance with policies and procedures, and the effectiveness of all financial, opera-tion and related controls, are formally assessed by independent internal audit staff and external auditors in each audit cycle.

Auditing and Compliance

System of Management Control (SMC)

Our System of Management Control (SMC) sets forth theCompany's basic principles, concepts and standards foran effective system of management control. We haveevolved a system of management controls to ensureeffective, efficient and proper utilization of its resources inpursuit of the Company's objectives, with due regard forthe respective interests of its stakeholders and the public.The basic purpose of such controls is to see thatbusiness is conducted properly in accordance withmanagement's general and specific directives.

The SMC is based on 7 basic principles which are :Decentralization of Management, Segregation of Dutiesand Responsibilities, Documentation, Supervision andReview, Timeliness, Relevance to Risk, and MinimumInter-dependence of Controls. Management at all levelsis required to establish systems and procedures thatmeet or exceed these control principles.

Controls Integrity Management System (CIMS)

Our Controls Integrity Management System (CIMS) is aformal system of internal methods and analytical tool toassess and mitigate operating, financial, and administrativecontrol risks, and facilitate the timely reporting tomanagement of control weaknesses and businesspractice issues. CIMS is based on the principles andstandards of SMC and provides key attributes of aneffective control system for ensuring that the Company'spolicies and in-line controls are implemented andeffectively sustained over time.

CIMS is comprised of seven elements: "Management,Leadership, Commitment & Accountability", "RiskAssessment", "Business Procedure Management &Improvement", "Personnel & Training", "Management ofChange", "Reporting & Resolution of Control Weakness",and "Controls Integrity Assessment". Each element hasfive components: Objective, Standards, Procedures,Expected Results, and Verification & Feedback Mechanism.

Independent External Audit

Independent external auditors audit the Company'sfinancial statements in accordance with generallyaccepted auditing standards in Thailand to ensure thatthe financial statements are free of materialmisstatement and in conformity with generally acceptedaccounting principles.

Auditor's Remuneration

The audit fees paid to the office of external auditor,PricewaterhouseCoopers ABAS Limited, for the 2009accounting period was Baht 4,300,000.

Internal Control Audit

The internal audit staff independently assessescompliance with policies and procedures, and evaluatesthe effectiveness of all control system related to thebusiness. Management of each business segment isobligated to consider all internal audit findings andrecommendations, and take appropriate actions.Generally, each segment of the business receives aninternal audit about every three years.

In addition, business segments appoint their ControlAdvisors to provide guidance on controls and toperiodically facilitate their Unit Internal Assessments(UIA) based on CIMS and audit standards.

The results of internal audits are reviewed by the AuditCommittee.


related party transactions

In order to leverage on the global expertise of ExxonMobil, the Company has executed numerous agreements withExxonMobil and its affiliates. These agreements are beneficial to the Company and are essential to the way the Companyoperates its business to the high standards of ExxonMobil. These agreements have terms and conditions that are on the samebasis as those applied generally to all ExxonMobil affiliates worldwide. We believe these agreements are arm's length andhave terms, conditions that are fair and reasonable. All of these related party agreements have been reviewed by the AuditCommittee.

Necessity and Reasonableness of related party transactions

All related party transactions undertaken in the past yearpursuant to these agreements are for maximum benefit ofthe Company, and have been subject to review by theCompany’s external auditors as part of their audit of theCompany’s annual financial statements, and have beenreviewed by the Audit Committee. The Audit Committeehas considered and provided an opinion that suchtransactions were entered into in normal course ofbusiness and are arm's length, and have been properlydisclosed.

Approval of related party transactions

All our existing related party agreements are in thenormal course of our business. The approval processesfor related party agreements are consistent with thoseprescribed by the relevant rules and regulations of theStock Exchange of Thailand. Where there is a likelihoodof a conflict of interest arising from the Company's entryinto a related party agreement with a person who is ashareholder, director or executive of the Company, thesaid shareholder, director or executive will not participatein the approval process for such agreement.

On August 28, 2008, the Board of Directors approved theCompany and its subsidiaries to enter into certaintransactions with its directors, executives and/or relatedpersons (as defined in the Securities and Exchange Act)where, in principle, such transactions have the sameterms as those which may ordinarily be entered into byordinary persons with unrelated counterparties undersimilar circumstances, based on commercial negotia-tions, and without preference resulting from the status ofbeing a director, executive or related person, as the casemay be, or where the transactions reflect fair prices or areon a cost or cost plus basis pursuant to agreementsbetween the Company and its affiliates, or where thecharges under the transactions are consistent with thosecharged by or other affiliates around the world for similarservices or goods, or where the interest expenses inconnection with financing transactions with theCompany's affiliates are generally based on fair andmarket rates.

Related party transactions in the future

We will ensure that any new related party agreements inthe future will comply with the Board resolution of August28, 2008 described above, as well as applicable lawsand regulations of the Securities and ExchangeCommission and the Stock Exchange of Thailand.

Subject to the above, where the Company proposesexecuting a related party agreement, the Audit Committeeshall review and render an opinion on such agreement.The Audit committee's opinion will be communicated tothe Board of directors or shareholders, as the case maybe, to ensure the proposed agreement is in the bestinterest of the Company.

Detail of Related party transactions

We list below the main agreements, with related parties.


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sine

ss s

uch

asac

coun

ting,

lega

l, ta

x, h

uman

res

ourc

es,

offic

e sp

ace,

and

cler

ical

act

iviti

es,

com

pute

r ne

twor

k se

rvic

es a

nd p

rocu

rem

ent

serv

ices

.

2009

Tra

nsac

tion

Val

ue (

Mill

ion

Bah

t)P

artie

s/R

elat

ions

hip

with

the

Com

pany

Mai

n P

urpo

ses

Sal

esP

urch

ase

Ser

vice

Inco

me

Ser

vice

Exp

ense

s

Go

od

s an

d S

ervi

ces

Cru

de o

il, L

PG

, P

rodu

cts

and

Fee

dsto

ck,

and

Lube

Bas

esto

ck S

uppl

yA

gree

men

t

Par

axyl

ene

and

Ben

zene

conc

entr

ate

Sup

ply

and

Offt

ake

Agr

eem

ent

Sal

e A

gree

men

t (IS

OM

BZ

)(s

pot

basi

s)

Cru

de o

il,P

rodu

cts

and

Fee

dsto

cks

Sup

ply

Agr

eem

ent

"Ban

gkok

Bus

ines

s S

uppo

rtC

ente

r" M

aste

r S

ervi

ceA

gree

men

t

Dow

nstr

eam

Reg

iona

lH

eadq

uart

ers/

Aff

lilia

teM

aste

r S

ervi

ce A

gree

men

t

Che

mic

al R

egio

nal

Hea

dqua

rter

s/A

ffilia

teS

ervi

ce A

gree

men

t

Agr

eem

ents

15,8

74

67,3

59

38,8

39

1,32

4

57

76


Exx

onM

obil

Glo

bal

Ser

vice

sC

ompa

ny (

"EM

GS

C")

EM

GS

C is

an

affil

iate

of E

MC

,w

hich

EM

C d

irect

ly h

olds

100%

of

shar

es in

EM

GS

C

EM

CA

P

Exx

onM

obil

Avi

atio

nIn

tern

atio

nal

Ltd.

("E

MA

")

EM

A is

an

affil

iate

of E

MC

,w

hich

EM

C i

ndire

ctly

hol

ds10

0% o

f sh

ares

in E

MA

Sta

ndar

d T

anke

rs B

aham

asLt

d ("

ST

B")

ST

B is

an

affil

iate

of E

MC

,w

hich

EM

C i

ndire

ctly

hol

ds10

0% o

f sh

ares

in S

TB

Exx

onM

obil

Res

earc

h an

dE

ngin

eeri

ng C

ompa

ny("

EM

RE

")

EM

RE

is a

n af

filia

te o

f EM

C,

whi

ch E

MC

dire

ctly

hol

ds10

0% o

f sh

ares

in E

MR

E

Anc

on I

nsur

ance

Com

pany

,In

c ("

AN

CO

N")

AN

CO

N is

an

affil

iate

of E

MC

,w

hich

EM

C i

ndire

ctly

hol

ds10

0% o

f sh

ares

in A

NC

ON

EM

GS

C p

rovi

des

Ess

o w

ith a

dvic

e an

d as

sist

ance

rel

atin

g to

(i) i

nfor

mat

ion

tech

nolo

gy s

ervi

ces

(ii)

proc

urem

ent

serv

ices

(iii)

real

est

ate

serv

ices

and

fac

ilitie

s se

rvic

es.

EM

CA

P s

ells

or

caus

es t

o be

sol

d to

Ess

o ch

emic

al p

rodu

cts

in s

uch

a vo

lum

e as

Ess

o no

min

ates

from

tim

e to

tim

e.

EM

A p

rovi

des

Ess

o a

wid

e ra

nge

of m

arke

ting

and

tech

nica

las

sist

ance

app

ropr

iate

to

Ess

o's

avia

tion

fuel

bus

ines

sin

clud

ing

solic

itatio

n of

avi

atio

n sa

les

and

gene

ral

advi

sory

serv

ices

and

con

sulta

ncy.

ST

B p

rovi

des

serv

ices

rel

ated

to

(i) v

esse

l poo

l act

iviti

es a

ndtr

ansp

orta

tion

for

purc

hase

rs' c

argo

es o

f cr

ude

oil,

petr

oleu

mpr

oduc

ts,

and

chem

ical

s (ii

) ch

arte

ring

and

tran

spor

tatio

nsu

ppor

t se

rvic

es (

iii)

mar

ine

vetti

ng s

ervi

ces

(iv)

othe

rsu

ppor

ting

serv

ices

rel

ated

to

the

pool

ves

sels

as

wel

l as

othe

r m

arin

e tr

ansp

orta

tion

activ

ities

.

Agr

eem

ent

is m

ade

for

the

purp

ose

of (

i) cr

eatio

n, a

cqui

sitio

nan

d m

anag

emen

t of

a b

ody

of t

echn

ical

info

rmat

ion,

tec

hnic

alse

rvic

es,

and

pate

nt a

nd c

opyr

ight

pro

tect

ion

for

the

bene

fit o

fpe

trol

eum

and

che

mic

al o

pera

tions

(ii)

acc

ess

to t

echn

ical

info

rmat

ion

and

the

use

of p

aten

t an

d co

pyrig

ht p

rote

ctio

n (ii

i)en

gine

erin

g as

sist

ance

and

spe

cial

res

earc

h (iv

) ad

min

iste

rin

telle

ctua

l pr

oper

ty a

nd t

echn

ical

inf

orm

atio

n ac

quire

d o

rm

ade

for

the

bene

fit o

f Ess

o.

AN

CO

N,

as t

he in

sure

r, is

sues

cov

erag

e un

der

onsh

ore

prop

erty

pol

icy,

thi

rd p

arty

liab

ility

pol

icy,

and

mar

ine

carg

opo

licy,

inc

ludi

ng p

acka

ge p

rodu

cts

deliv

ered

via

pla

ne,

mar

ine

and/

or l

and

tran

spor

tatio

n.

2009

Tra

nsac

tion

Val

ue (

Mill

ion

Bah

t)P

artie

s/R

elat

ions

hip

with

the

Com

pany

Mai

n P

urpo

ses

Sal

esP

urch

ase

Ser

vice

Inco

me

Ser

vice

Exp

ense

s

Mas

ter

Ser

vice

Agr

eem

ent

Sal

e A

gree

men

t

Ess

oAir

Ser

vice

Agr

eem

ent

Inte

r A

ffilia

te M

arin

eT

rans

port

atio

n S

ervi

ces

Agr

eem

ent

Sta

ndar

d R

esea

rch

Agr

eem

ent

Insu

ranc

e P

olic

y

Agr

eem

ents

48

2,09

17

5

76

791

(1)

2,05

62 17

7


Exx

onM

obil

Cat

alys

tT

echn

olog

ies

LLC

("E

MC

T")

EM

CT

is a

n af

filia

te o

f EM

C,

whi

ch E

MC

ind

irect

ly h

olds

100%

of

shar

es in

EM

CT

EM

C

EM

C is

the

ulti

mat

e pa

rent

com

pany

of

vario

us a

ffilia

tes

and

subs

idia

ries

EM

C

EM

C

Exx

onM

obil

Hon

g K

ong

Lim

ited

("E

MH

KL

")

EM

HK

L is

an

affil

iate

of E

MC

,w

hich

EM

C i

ndire

ctly

hol

ds10

0% o

f sh

ares

in E

MH

KL

Exx

onM

obil

Cat

alys

t S

ervi

ces

Inc.

("E

MC

SI"

)

EM

CS

I is

an a

ffilia

te o

f EM

C,

whi

ch E

MC

dire

ctly

hol

ds10

0% o

f sh

ares

in E

MC

SI

EM

CT

, as

a le

ssor

, com

mits

to s

uppl

y an

d le

ase

cata

lyst

s to

Ess

o.

EM

C a

utho

rizes

Ess

o to

use

Ess

o, E

xxon

, Ess

o O

val a

ndE

xxon

Em

blem

tra

dem

arks

in T

haila

nd in

ass

ocia

tion

with

the

reta

il pr

oduc

ts.

Ess

o pa

rtic

ipat

es in

a t

rade

mar

k co

st s

harin

g ag

reem

ent

tom

aint

ain,

enh

ance

and

dev

elop

the

tra

dem

arks

oth

er t

han

thos

e un

der

the

Pet

role

um R

etai

l Pro

duct

s T

rade

mar

k Li

cens

eA

gree

men

t.

EM

C t

o pr

ovid

e th

e se

rvic

e of

ope

ratin

g th

e T

rade

Cen

tral

Cle

arin

g H

ouse

Sub

-Acc

ount

and

oth

er C

entr

al C

lear

ing

Hou

se S

ub-A

ccou

nt f

or t

he p

urpo

se o

f fa

cilit

atin

g ef

ficie

ntse

ttlem

ent

and

proc

essi

ng o

f tr

ansa

ctio

ns.

EM

HK

L pr

ovid

es /

rec

eive

s se

rvic

es t

o/fr

om E

sso

cove

ring

man

ager

ial,

prof

essi

onal

and

adm

inis

trat

ive,

and

oth

erop

erat

iona

l ad

vice

rel

atin

g to

the

ir ov

eral

l co

rpor

ate

oper

a-tio

ns to

Ess

o.

ES

CS

I pr

ovid

es s

ervi

ces

incl

udin

g ar

rang

ing

for

supp

ly o

fpr

ecio

us m

etal

s; a

rran

ging

for

the

fab

ricat

ion

of c

atal

yst,

the

recl

amat

ion

of p

reci

ous

met

als

from

spe

nt c

atal

yst,

and

cata

lyst

ope

ratio

ns s

uch

as r

egen

erat

ion

as w

ell a

s co

nsul

ting

serv

ices

rel

atin

g to

cat

alys

t.

2009

Tra

nsac

tion

Val

ue (

Mill

ion

Bah

t)P

artie

s/R

elat

ions

hip

with

the

Com

pany

Mai

n P

urpo

ses

Sal

esP

urch

ase

Ser

vice

Inco

me

Ser

vice

Exp

ense

s

Cat

alys

t Le

ase

Agr

eem

ent

Pet

role

um R

etai

l P

rodu

cts

Tra

dem

ark

Lice

nse

Agr

eem

ent

Tra

dem

ark

Cos

t S

harin

gA

gree

men

t

Cle

arin

g H

ouse

Ser

vice

Agr

eem

ent

Ser

vice

Agr

eem

ent

Ser

vice

Agr

eem

ent

Agr

eem

ents

36 4 24

(9)


Exx

onM

obil

Che

mic

alC

ompa

ny (

"EM

CC

")

EM

CC

is a

div

isio

n of

EM

C

Exx

onM

obil

Mar

ine

Lim

ited

("E

MM

L")

and

EM

AP

PL

EM

ML

is a

n af

filia

te o

f EM

C,

whi

ch E

MC

ind

irect

ly h

olds

100%

of

shar

es in

EM

ML

Ess

o pr

ovid

es c

erta

in s

ervi

ces

rela

ting

to m

arke

ting

effo

rts

inT

haila

nd t

o E

MC

C.

Ess

o se

lls a

nd d

eliv

ers

mar

ine

fuel

s as

wel

l as

prov

ides

rela

ted

serv

ices

to

EM

ML

and

EM

AP

PL.

2009

Tra

nsac

tion

Val

ue (

Mill

ion

Bah

t)P

artie

s/R

elat

ions

hip

with

the

Com

pany

Mai

n P

urpo

ses

Sal

esP

urch

ase

Ser

vice

Inco

me

Ser

vice

Exp

ense

s

Ser

vice

Agr

eem

ent

Exx

onM

obil

Mar

ine

Fue

lsS

uppl

y an

d S

ervi

ces

Agr

eem

ent

Oth

ers

Agr

eem

ents

EM

LE

sso

prov

ides

a lo

an c

omm

itmen

t to

EM

L w

ith t

he m

axim

umpr

inci

pal a

mou

nt o

f B

aht

3,00

0 m

illio

n.

In t

he e

vent

tha

tm

oney

fro

m E

ML

is d

epos

ited

in c

urre

nt a

ccou

nt,

Ess

o ca

nm

ake

use

of s

uch

fund

and

is r

equi

red

to p

ay in

tere

st f

or t

hede

posi

ted

amou

nt.

2009

Tra

nsac

tion

Val

ue (

Mill

ion

Bah

t)

Par

ties

Mai

n P

urpo

ses

Lo

an

Ba

lan

ceD

epos

itB

ala

nce

Inte

rest

Exp

ense

Inte

rest

Inco

me

Fin

anci

al A

ssis

tan

ce

Loan

and

Cur

rent

Acc

ount

Agr

eem

ent

Agr

eem

ents

(1)

Bah

t 70

8 m

illio

n pa

id t

o E

MR

E is

cla

ssifi

ed a

s ca

pita

l exp

endi

ture

s.

(2)

Bah

t 62

6 m

illio

n se

rvic

e ex

pens

es p

aid

to T

hai P

etro

leum

Pip

elin

e C

ompa

ny L

imite

d is

not

incl

uded

.

3

1,57

1

01

36

42

32

24

17

2

TO

TA

L (

see

note

to

finan

cial

sta

tem

ent

no.3

2)3,

357

13

110,

481(

2)17

,445

TO

TA

L (

see

note

to

finan

cial

sta

tem

ent

no.3

2)2

41

07

2


board of directors

Mr.Adisak

Jangkamolkulchai

Director

Mr.Kurujit

Nakornthap

IndependentDirector

Mr.Robert

Michael Cooper

Chairman andManaging Director

Mr.Sompop

Amatayakul

IndependentDirector andChairman ofAudit Committee

Mr.Mongkolnimit

Auacherdkul

Directorand Member ofPerformanceEvaluation Committee

Ms.Porntida

Boonsa

Director


Mr.Somjate

Saifon

Director

Mr.Mark Ell

Northcutt

Director

Ms.Wattanee

Phanachet

IndependentDirectorand Memberof Audit Committee

Mr.Smit

Tiemprasert

IndependentDirector, Chairmanof PerformanceEvaluationCommittee andMember of AuditCommittee

Mr.Wattana

Chantarasorn

Director andMember ofPerformanceEvaluationCommittee

Mr.Kwok Yew

Meng

Director


Mr. Mongkolnimit AuacherdkulDirector and Member of Performance Evaluation Committee

Age : 52

Education : M.Sc in Mechanical Engineering,University of Cincinnati, USA

Current Positions : Public and Government Affairs Manager,Esso (Thailand) Public Company Limited

Experience : 2006 - 2009 Public Affairs Manager,ExxonMobil Limited

2003 - 2005 Refinery CoordinationManager, Esso (Thailand) Public CompanyLimited

Records of Noneviolation of law* :

Family Relationship Nonewith Executives ofthe Company :

Shareholding in Nonethe Company (%) :

Mr. Mark Ell NorthcuttDirector

Age : 47

Education : B.Sc in Chemical Engineering,Texas Tech University, USA

Current Positions : Refinery Manager,Esso (Thailand) Public Company Limited

Experience : 2006 - 2008 Project & Planning ExecutiveRefining, ExxonMobil Refining & SupplyCompany, USA

2004 - 2006 Manager Global Manufacturing,ExxonMobil Lubricants & SpecialtiesCompany, USA

2001 - 2004 Manager Process, BatonRouge Refinery, ExxonMobil Refining &Supply Company, USA




Ms. Porntida BoonsaDirector

Age : 43

Education : M.BA in Finance and Accounting,Wharton School,University of Pennsylvania, USA

Current Positions : China Business Services Manager andController, ExxonMobil (China)Investment Company Limited

Director of various ExxonMobil Affiliates

Experience : 2006 - 2009 Director and Asia-PacificTreasurer, ExxonMobil Asia Pacific Pte.Ltd., Singapore

2004 - 2005 Project Executive, ExxonMobil Corporation, USA

2003 - 2004 Asia-Pacific Logistic BusinessDevelopment Manager, ExxonMobil AsiaPacific Pte. Ltd., Singapore


Family Relationship Wife of Mr. Chai Jangsirikul (Controller,with Executives of Esso (Thailand) Public Company Limited)the Company :


Mr. Robert Michael CooperChairman and Managing Director

Age : 48

Education : BA/Business,University of Northumbria, UK

Current Positions : Chairman and Managing Director,Esso (Thailand) Public Company Limited

Chairman and Managing Director,ExxonMobil Limited

Chairman and Managing Director,Mobil Enterprises (Thailand) Limited

Experience : 2006 - 2009 Manager Investor Relations,Exxon Mobil Corporation, USA

2005 - 2006 Upstream General Auditor,ExxonMobil, USA

2001 - 2005 Manager FinancialReporting and Analysis, ExxonMobil, USA





Mr. Adisak JangkamolkulchaiDirector

Age : 46

Education : Ph.D in Chemical Engineering,University of Tulsa, USA

Current Positions : Refinery Process Manager, Esso (Thailand)Public Company Limited

Experience : 2005 - 2006 Process Department Manager,Baytown Refinery, ExxonMobil Refining &Supply Company, USA

2003 - 2005 Technical Department Manager,Baytown Refinery, ExxonMobil Refining &Supply Company, USA

2001 – 2003 Asia-Pacific RefiningOptimization Advisor, ExxonMobil Refining &Supply Company, USA




Mr. Kwok Yew MengDirector

Age : 40

Education : B.Social Sc in Economics, NationalUniversity of Singapore, Singapore

Current Positions : Retail Manager, Esso (Thailand) PublicCompany Limited

Chairman and Managing Director, IndustryPromotion Enterprises Limited

Chairman and Managing Director, UnitedIndustry Development Company Limited

Chairman and Managing Director,Pacesetter Enterprise Limited

Experience : 2007 - 2008 Planning Manager, SinopecSenMei (Fujian) Petroleum Company Limited,China

2004 - 2007 Manager AP Retail Pricing,ExxonMobil Oil Singapore Pte. Ltd, Singapore

2001 - 2004 Strategy Analyst,Exxon Mobil Corporation, USA




Mr. Wattana ChantarasornDirector and Member of Performance Evaluation Committee

Age : 63

Education : M.Sc in Chemical Engineering, IllinoisInstitute of Technology, USA

Current Positions : -

Experience : 2006 - 2007 Asia-Pacific Refining BusinessAdvisor, ExxonMobil Limited

2004 - 2006 Asia -Pacific RefiningBusiness Advisor, Esso (Thailand) PublicCompany Limited

1997 - 2004 Refinery Manager, Esso(Thailand) Public Company Limited




Mr. Kurujit NakornthapIndependent Director

Age : 54

Education : Ph.D in Petroleum Engineering,University of Oklahoma, USA

Current Positions : Director-General, Department of MineralFuels, Ministry of Energy

Experience : 2006 - 2008 Deputy Permanent Secretaryof the Ministry of Energy

2006 - 2006 Deputy Director General of theDepartment of Mineral Fuels,Ministry of Energy

2004 - 2006 Director of Bureau ofPetroleum Operation and Coordination,Ministry of Energy

2000 - 2004 Chief Executive Officer of theMalaysia-Thai Joint Authority (MTJA),Ministry of Industry





Mr. Sompop AmatayakulIndependent Director and Chairman of Audit Committee

Age : 69

Education : Honorary Doctorate in Commerce,Thammasat University, Thailand

Honorary Doctorate in BusinessAdministration, National Institute ofDevelopment Administration, Thailand

International Management Course,Columbia University, USA

Current Positions : Vice Chairman and Chairman of AuditCommittee, Saha Union PLC

Director, Civil Service Commission

Director, The Public Sector DevelopmentCommission

Director and Audit Committee of 3 publiccompanies

Chairman, Institute of ManagementEducation of Thailand (IMET)

Vice President of the Thai Chamber ofCommerce

Experience : Deputy Minister of Industry

Chairman of the Board,Bangkok Metropolitan Bank PLC

Chairman of the Board,The State Railway of Thailand

General Manager, IBM Thailand Co., Ltd.



Shareholding in 0.0001the Company (%) :

Mr. Smit TiemprasertIndependent Director, Chairman of Performance EvaluationCommittee and Member of Audit Committee

Age : 70

Education : M.Sc in Industrial Engineering andManagement, Oklahoma State University,USA

Current Positions : -

Experience : 2005 - 2007 Advisor,Betagro Agro Group PLC

2001 - 2003 Chief Operating Officer,Thai Petrochemical Industries PLC




Mr. Somjate SaifonDirector

Age : 52

Education : M.Eng, Asian Institute of Technology,Thailand

Current Positions : Chemicals Manager, Esso (Thailand) PublicCompany Limited

Experience : 2005 - 2007 Director and Fluid SalesManager, ExxonMobil Chemical(Thailand) Limited

2002 - 2005 Chemical Manager of ThaiAromatics, Esso (Thailand) PublicCompany Limited




Ms. Wattanee PhanachetIndependent Director and Member of Audit Committee

Age : 72

Education : M.A. (Accounting),University of Alabama, USA

Certified Public Accountant

Current Positions : Group Business Committee Member,Electricity Generating PLC

Independent Director and Audit CommitteeMember, Capital Nomura Securities PLC

Independent Director and Audit CommitteeMember, Thai Poly Acrylic PLC

Experience : 2007 – 2009 Independent Director andAudit Committee Member, ElectricityGenerating PLC

2003 - 2006 Member of the Committee onCurriculum Quality Guarantee of the Facultyof Commerce and Accountancy,Chulalongkorn University

1999 - 2005 Independent Director andAudit Committee Member, Delta ElectronicsThailand PLC




(before 2003)


executive officers

01 Mr. Robert Michael Cooper Chairman and Managing Director

02 Mr. Mongkolnimit Auacherdkul Director and Public and Government

Affairs Manager

03 Mr. Chai Jangsirikul Controller

04 Mr. Somjate Saifon Director and Chemicals Manager

05 Mr. Adisak Jangkamolkulchai Director and Refinery Process Manager

06 Mr. Mark Ell Northcutt Director and Refinery Manager

07 Mr. Zako Pavlovic Lubricants Manager

08 Ms. Ratrimani Pasiphol Treasurer / Tax Manager

09 Ms. Phantipa Rasananda Investor Relations Manager

10 Mr. Channarong Janjitmun Industrial and Wholesale Manager

11 Mr. Kwok Yew Meng Director and Retail Manager

01

02

03 11

0910040706

08 05


Mr. Channarong JanjitmunIndustrial and Wholesale Manager

Age : 55

Education : MBA, Thammasat University, Thailand

Current Positions : Industrial and Wholesale Manager, Esso(Thailand) Public Company Limited

Experience : 2004 – 2007 Director, Esso (Thailand)Public Company Limited

2000 – 2007 Industrial and WholesaleManager, Esso (Thailand) PublicCompany Limited




Ms. Ratrimani PasipholTreasurer / Tax Manager

Age : 42

Education : MBA, University of Washington, USA

Current Positions : Treasurer / Tax Manager, Esso (Thailand)Public Company Limited

Treasurer, ExxonMobil Limited

Experience : 2002 – 2004 Assistant Treasurer,ExxonMobil Limited



Shareholding in 0.0003the Company (%) :

Mr. Chai JangsirikulController

Age : 52

Education : MBA, Thammasat University, Thailand

Current Positions : Controller,Esso (Thailand) Public Company Limited

Controller,ExxonMobil Limited

Experience : 2005 – 2007 L&S Controller Manager,Asia-Pacific Region, ExxonMobil Asia PacificPte. Ltd., Singapore

2002 – 2005 Financial Accounting andReporting Process Manager,ExxonMobil Limited


Family Relationship Husband of Ms. Porntida Boonsa (Director,with Executives of Esso (Thailand) Public Company Limited)the Company :


Mr. Zarko PavlovicLubricants Manager

Age : 48

Education : B.Sc in Mechanical Engineering, Universityof Belgrade, Serbia

Current Positions : Lubricants Manager, Esso (Thailand) PublicCompany Limited

Experience : 2005 – 2008 India Cluster Sales Manager,ExxonMobil Lubricants Pvt Ltd., India




Ms. Phantipa RasanandaInvestor Relations Manager

Age : 55

Education : MBA, University of Missouri - Kansas City,USA

Current Positions : Investor Relations Manager, Esso (Thailand)Public Company Limited

Director, ExxonMobil Limited

Experience : 2005 – 2008 Business Support CenterArea Manager, Bangkok and Shanghai,ExxonMobil Limited

2003 – 2005 HR BSC Expansion ProjectManager, ExxonMobil Limited




* This covers any of the following within the past 10 years:

(1) a conviction under a criminal charge, excluding convictionfor traffic offences and minor charges;

(2) being declared bankrupt or having assets controlled; or

(3) being dismissed from government service or a stateorganization or agency for dishonest at work.


statement ofdirectors' responsibilitiesfor financial reporting

The accompanying consolidated financial statements of Esso (Thailand) Public Company

Limited and its subsidiaries and the company financial statements have been prepared in

conformity with the requirements of the Public Limited Companies Act B.E. 2535, the Securities

and Exchange Act B.E. 2535 and the Accounting Act B.E. 2543.

The Board of Directors is of the opinion that the financial statements have been prepared in a

prudent manner and contain accurate and complete material information in respect of the

financial condition, results of operations and cash flows of the Company and its subsidiaries.

An effective internal control system has been established to safeguard assets and identify

weaknesses to prevent fraud, unlawful conduct and irregularities. The appropriate accounting

policies were consistently applied in accordance with generally accepted accounting principles

and material information was adequately disclosed in the notes to the financial statements.

Mr. Robert Michael Cooper

Chairman and Managing Director



auditor’s reportfinancial statementsnotes to financial statements


auditor’s report

To the Shareholders of Esso (Thailand) Public Company Limited

I have audited the accompanying consolidated and company balance sheets as at 31December 2009 and 2008, and the related consolidated and company statements of income,changes in shareholders' equity and cash flows for the years then ended of Esso (Thailand)Public Company Limited (the "Company") and its subsidiaries (the "Group"), and of theCompany, respectively. The Company's management is responsible for the correctness andcompleteness of information in these financial statements. My responsibility is to express anopinion on these financial statements based on my audits.

I conducted my audits in accordance with generally accepted auditing standards. Thosestandards require that I plan and perform an audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements.An audit also includes assessing the accounting principles used and significant estimates madeby management, as well as evaluating the overall financial statement presentation. I believe thatmy audits provide a reasonable basis for my opinion.

In my opinion, the consolidated and company financial statements referred to above presentfairly, in all material respects, the consolidated and company financial position as at 31December 2009 and 2008, and the consolidated and company results of operations, and cashflows for the years then ended of the Group and of the Company, respectively, in accordancewith generally accepted accounting principles.

Prasan ChuaphanichCertified Public Accountant (Thailand) No.3051

PricewaterhouseCoopers ABAS Limited

Bangkok26 February 2010



balance sheetsAs at 31 December 2009 and 2008(All amounts in Baht thousand unless otherwise stated)

The notes on pages 67 to 97 are an integral part of these consolidated and company financial statements.

Consolidated Company

Assets Note 2009 2008 2009 2008

Current assets

Cash and cash equivalents 5 1,167,821 641,866 948,413 481,768

Short-term investments 63,938 66,099 63,938 66,099

Trade receivables, net 6 4,665,199 3,490,572 4,644,346 3,480,480

Trade receivables from a related party 32f - - 1,156,949 464,858

Amounts due from related parties 32f 38,006 41,730 76,164 74,220

Short-term loans to related parties 32g - 194,110 - 282,408

Inventories 7 18,383,631 12,724,110 18,015,969 12,465,681

Tax claim receivable 8 1,044,756 681,803 1,037,391 650,703

Other current assets 9 1,008,343 593,353 1,177,690 752,630

26,371,694 18,433,643 27,120,860 18,718,847

Non-current assets

Investments in subsidiaries and

an associate 10 454,771 193,224 1,843,949 1,843,949

Available-for-sale financial assets 11 291,600 193,636 291,600 193,636

Long-term loans to related parties 32g - - 1,817,620 1,612,415

Deferred income tax assets, net 12 5,364,730 7,120,200 5,179,811 6,913,161

Intangible assets, net 13 472,679 542,155 472,679 542,155

Property, plant and equipment, net 14 27,961,963 27,129,188 23,379,738 22,528,038

Prepaid rental and deferred charges 15 981,355 1,334,543 3,321,093 3,871,476

Other non-current assets 116,011 123,621 96,883 104,525

35,643,109 36,636,567 36,403,373 37,609,355

Total assets 62,014,803 55,070,210 63,524,233 56,328,202






Liabilities and shareholders' equity Note 2009 2008 2009 2008

Current liabilities

Borrowings 16 22,363,173 27,971,499 22,363,173 27,971,499

Trade and other payables 17 3,148,655 2,338,196 3,044,898 2,213,642

Short-term loans from related parties 32h 240,993 - 823,941 915

Amounts due to related parties 32f 5,621,652 3,372,949 5,628,780 3,381,478

31,374,473 33,682,644 31,860,792 33,567,534

Non-current liabilities

Long-term loans from related parties 32h - - 5,371 5,890

Borrowings 16 5,500,000 - 5,500,000 -

Provision for pensions and employee benefits 18 826,403 736,126 826,403 736,126

Other non-current liabilities 238,999 231,600 238,998 231,599

6,565,402 967,726 6,570,772 973,615

Total liabilities 37,939,875 34,650,370 38,431,564 34,541,149





Shareholders’ equity Note 2009 2008 2009 2008

Share capital

Authorised share capital 19 17,110,007 17,110,007 17,110,007 17,110,007

Issued and paid-up share capital 19 17,075,181 17,075,181 17,075,181 17,075,181

Share premium 19 4,031,711 4,031,711 4,031,711 4,031,711

Retained earnings/(accumulated losses)

Appropriated

Legal reserve 21a 549,010 343,997 549,010 343,997

Unappropriated 2,232,673 (1,146,842) 3,257,847 227,804

Fair value reserve 21b 178,920 108,360 178,920 108,360

24,067,495 20,412,407 25,092,669 21,787,053

Minority interest 7,433 7,433 - -

Total shareholders' equity 24,074,928 20,419,840 25,092,669 21,787,053

Total liabilities and shareholders' equity 62,014,803 55,070,210 63,524,233 56,328,202




statements of incomeFor the years ended 31 December 2009 and 2008(All amounts in Baht thousand unless otherwise stated)


Note 2009 2008 2009 2008

Sales 22 162,909,983 222,233,538 161,516,001 220,995,766

Cost of sales 23 (151,775,533) (226,485,371) (151,061,439) (225,715,655)

Gross profit/(loss) 11,134,450 (4,251,833) 10,454,562 (4,719,889)

Selling expenses 23 (4,262,569) (4,302,928) (3,753,130) (3,802,297)

Administrative expenses 23 (351,806) (398,796) (351,806) (398,796)

Management benefit expenses 23 (109,788) (79,701) (109,788) (79,701)

Profit/(loss) from sales 6,410,287 (9,033,258) 6,239,838 (9,000,683)

Other income 59,007 87,585 49,452 83,627

Operating profit/(loss) 6,469,294 (8,945,673) 6,289,290 (8,917,056)

Share of profit from an associate 10 261,547 218,061 - -

Reversal of impairment provision

on investment in an associate 10 - - - 1,729,360

Profit/(loss) before finance costs

and income tax 6,730,841 (8,727,612) 6,289,290 (7,187,696)

Finance costs, net 24 (536,477) (1,188,868) (485,909) (1,173,858)

Profit/(loss) before income tax 6,194,364 (9,916,480) 5,803,381 (8,361,554)

Income tax (expense)/credit 25 (1,743,800) 3,052,728 (1,703,110) 3,042,282

Profit/(loss) for the year 4,450,564 (6,863,752) 4,100,271 (5,319,272)

Attributable to:

Equity holders of the Company 4,449,743 (6,864,581) 4,100,271 (5,319,272)

Minority interest 821 829 - -

4,450,564 (6,863,752) 4,100,271 (5,319,272)

Earnings/(loss) per share for profit/(loss)

attributable to equity holders of the Company

(expressed in Baht per share)

Basic/diluted 26 1.29 (2.16) 1.18 (1.68)




statements of changesin shareholders’ equityFor the years ended 31 December 2009 and 2008(All amounts in Baht thousand unless otherwise stated)

The

not

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ges

67 t

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433

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40



statements of changesin shareholders’ equityFor the years ended 31 December 2009 and 2008(All amounts in Baht thousand unless otherwise stated)


Company

Retained earnings

Issued and Appropriated - Unappropriated -

Note paid-up Share legal retained Fair value Total

share capital premium reserve earnings reserve

Balance at 1 January 2009 17,075,181 4,031,711 343,997 227,804 108,360 21,787,053

Net profit for the year - - - 4,100,271 - 4,100,271

Dividends paid 20 - - - (865,215) - (865,215)

Fair value gains on available-for-sale

financial assets, net of tax 21b - - - - 70,560 70,560

Allocation of net profit to legal reserve 21a - - 205,013 (205,013) - -

Balance at 31 December 2009 17,075,181 4,031,711 549,010 3,257,847 178,920 25,092,669

Balance at 1 January 2008 12,877,218 - 343,997 10,738,363 257,040 24,216,618

Net loss for the year - - - (5,319,272) - (5,319,272)

Issuance of new shares 19 4,197,963 4,031,711 - - - 8,229,674

Dividends paid 20 - - - (5,191,287) - (5,191,287)

Fair value losses on available-for-sale

financial assets, net of tax 21b - - - - (148,680) (148,680)

Balance at 31 December 2008 17,075,181 4,031,711 343,997 227,804 108,360 21,787,053



statements of cash flowsFor the years ended 31 December 2009 and 2008(All amounts in Baht thousand unless otherwise stated)



Note 2009 2008 2009 2008

Cash flows from operating activities

Cash generated from operations 27 4,520,705 5,342,240 3,933,574 6,383,613

Interest paid (578,950) (1,246,309) (627,615) (1,344,939)

Income tax paid (2,459) (40,233) - -

Net cash generated from operating activities 3,939,296 4,055,698 3,305,959 5,038,674

Cash flows from investing activities

Net proceeds from short-term loans

to related parties 32g 194,110 222,449 282,408 134,151

Net additional long-term loans to subsidiaries 32g - - (205,205) (218,817)

Purchase of property, plant and equipment 14 (2,914,665) (1,163,925) (2,914,665) (1,163,925)

Dividends received 13,680 16,920 17,680 20,920

Interest received 9,461 54,952 114,780 160,697

Proceeds from disposals of property, plant and

equipment and intangible assets 27 17,442 37,596 16,722 37,596

Net cash used in investing activities (2,679,972) (832,008) (2,688,280) (1,029,378)

Cash flows from financing activities

Net proceeds from/(repayments of)

short-term borrowings 16 2,600,009 (6,745,000) 2,600,009 (6,745,000)

Repayments of long-term borrowings 16 (2,750,000) - (2,750,000) -

Net proceeds from/(repayments of) short-term

loans from related parties 32h 240,993 - 823,026 (593,721)

Net repayments of long-term loans from

related parties 32h - - (519) (353)

Net proceeds from issuance of ordinary shares 19 - 8,110,144 - 8,110,144

Dividends paid to equity holders

of the Company 20 (865,215) (5,191,287) (865,215) (5,191,287)

Dividends paid to minority interests (821) (829) - -

Net cash used in financing activities (775,034) (3,826,972) (192,699) (4,420,217)

Net increase/(decrease) in cash and cash equivalents

and bank overdrafts 484,290 (603,282) 424,980 (410,921)

Cash and cash equivalents and bank overdrafts

at the beginning of the year 5 635,367 1,238,649 475,269 886,190

Cash and cash equivalents and bank overdrafts

at the end of the year 5 1,119,657 635,367 900,249 475,269



notes to the consolidated andcompany financial statementsFor the years ended 31 December 2009 and 2008(All amounts in Baht thousand unless otherwise stated)

1 General information

Esso (Thailand) Public Company Limited ("the Company") is a public limited company incorporated and domiciled inThailand. The address of its registered office is 3195/17-29 Rama IV Road, Klongton, Klongtoey, Bangkok, 10110.

The Company and its subsidiaries (together "the Group") are involved in the refining and marketing of petroleum products aswell as in the operation of retail service stations. The Group operates a refinery and chemicals manufacturing plant inSriracha, Thailand. The Group also operates distribution facilities and oil terminals throughout Thailand. The Group'sproducts are sold through a network of retail service stations, directly to industrial customers and through export. Additionally,following the acquisition of ExxonMobil Chemical (Thailand) Limited in September 2007, the Group is involved in the sale ofchemicals products to both domestic and overseas customers.

The Company is listed on the Stock Exchange of Thailand ("SET"). The details of the initial public offering and commencementof trading on the SET are set out in Note 19.

The Company is a member of the ExxonMobil Group and is ultimately controlled by Exxon Mobil Corporation, a companyincorporated in the United States of America.

These consolidated and company financial statements were authorised for issue by the board of directors on 26 February2010.

2 Summary of significant accounting policies

The principal accounting policies adopted in the preparation of these consolidated and company financial statements are setout below. These policies have been consistently applied to all years presented, unless otherwise stated.

2.1 Basis of preparation

The consolidated and company financial statementshave been prepared in accordance with Thai generallyaccepted accounting principles ("Thai GAAP") under theAccounting Act B.E. 2543, being those Thai AccountingStandards issued under the Accounting Professions ActB.E. 2547, and the financial reporting requirements of theSecurities and Exchange Commission under the Securi-ties and Exchange Act B.E. 2535. The Group has earlyadopted prior to its effective date, Thai AccountingStandard No. 12 "Accounting for Income Taxes".

The consolidated and company financial statementshave been prepared under the historical cost convention,as modified for the revaluation of available-for-salefinancial assets.

The preparation of financial statements in conformity withThai GAAP requires the use of certain critical accountingestimates. It also requires management to exercise itsjudgement in the process of applying the Group'saccounting policies. The areas involving a higherdegree of judgement or complexity, or areas whereassumptions and estimates are significant to the consoli-dated and company financial statements are disclosed inNote 3.

As at 31 December 2009, the current liabilities of theGroup and of the Company exceeded the current assetsby approximately Baht 5,002,779 thousand and Baht4,739,932 thousand, respectively. As also discussed inNote 30.3, the Group currently has adequate financing


sources to enable the payment of liabilities as and whenthey become due as follows: (1) uncommitted borrowingfacilities from related companies and third parties in theamount of Baht 65,968,438 thousand to fund thepayment of liabilities, and (2) the Group has alsoreceived an approval from the Securities and ExchangeCommission to offer for sale Baht 8,000,000 thousand ofbills of exchange in a revolving program, of which Baht4,795,009 thousand has been utilized as of 31December 2009. Accordingly, the consolidated andcompany financial statements have been prepared on agoing concern basis and do not include any adjustmentsrelating to the recoverability and classification ofrecorded asset amounts, or to amounts or classificationof liabilities that may be necessary if the going concernbasis of preparing the consolidated and companyfinancial statements is not appropriate.

The comparative figures in the statements of income forcost of sales, selling expenses, administration expenses,management benefit expense, and, finance costs and thecomparative figures in Note 32c for expenses paid toother related parties have been reclassified to conformwith changes in presentation in the current year. Theamounts reclassified are individually and in aggregateinsignificant.

An English version of the consolidated and companyfinancial statements has been prepared from thestatutory financial statements that are in the Thailanguage. In the event of a conflict or a difference ininterpretation between the two languages, the Thailanguage statutory financial statements shall prevail.

2.2 New accounting standards and amendments to accounting standards

On 26 June 2009, the Federation of Accounting Professions announced the revision of the numbers used in the ThaiAccounting Standards to correspond with the numbers used in the International Accounting Standards.

(a) Amendments to Accounting Standards effective in 2009

The following standards have been revised and are effective for accounting periods beginning on or after 1 January2009.

Revised Standards

TAS 36 (revised 2007) Impairment of Assets

TFRS 5 (revised 2007) Non-Current Assets Held for Sale and Discontinued Operations(formerly TAS 54)

Accounting Framework (revised 2007) (effective 26 June 2009)

The above standards and accounting framework do not have a material impact on the financial statements beingpresented.

(b) New accounting standards and amendments to accounting standards effective in 2011 and 2012

The following new accounting standards and amendments to accounting standards are effective for accounting periodsbeginning on or after 1 January 2011 or 1 January 2012 and have not been early adopted by the Company and theGroup:

Effective for the period beginning on 1 January 2011

TAS 24 (revised 2007) Related Party Disclosure (formerly TAS 47)

TAS 40 Investment Property

Effective for the period beginning on 1 January 2012

TAS 20 Accounting for Government Grants and Disclosure for GovernmentAssistance

The Company's management has assessed and determined that the revised standard and the new standards will notsignificantly impact the financial statements being presented.


2.3 Consolidation

(a) Subsidiaries

Subsidiaries are all entities over which the Group hasthe power to govern the financial and operatingpolicies generally accompanying a shareholding ofmore than one half of the voting rights. The existenceand effect of potential voting rights that are currentlyexercisable or convertible are considered whenassessing whether the Group controls another entity.Subsidiaries are fully consolidated from the date onwhich the control is transferred to the Group. They arede-consolidated from the date that the control ceases.

The purchase method of accounting is used toaccount for the acquisition of subsidiaries by theGroup, including those under common control. Thecost of an acquisition is measured as the fair value ofthe assets given, equity instruments issued andliabilities incurred or assumed at the date ofexchange, plus costs directly attributable to theacquisition. Identifiable assets acquired, and liabilitiesand contingent liabilities assumed in a businesscombination are measured initially at their fair valuesat the acquisition date, irrespective of the extent ofany minority interest. The excess of the cost ofacquisition over the fair value of the Group's share ofthe identifiable net assets acquired is recorded asgoodwill. If the cost of acquisition is less than the fairvalue of the net assets of the subsidiary acquired, thedifference is recognised directly in the statements ofincome.

Intercompany transactions, balances and unrealisedgains on transactions between group companies areeliminated. Unrealised losses are also eliminated.Accounting policies of subsidiaries have beenchanged, where necessary, to ensure consistencywith the policies adopted by the Group.

In the Company's separate financial statements,investments in subsidiaries are reported using thecost method. A list of subsidiaries is included in Note10.

(b) Transactions with minority interests

The Group applies a policy of treating transactionswith minority interests as transactions with partiesexternal to the Group. Disposals to minority interestsresult in gains and losses for the Group that arerecorded in the statements of income.

(c) Associates

Associates are all entities over which the Group hassignificant influence but not the ability to governthe financial and operating policies, generallyaccompanying a shareholding of between 20%and 50% of the voting rights. Investments in associatesare accounted for using the equity method ofaccounting and are initially recognised at cost.

The Group's share of its associate's post-acquisitionprofits or losses is recognised in the consolidatedstatement of income, and its shares of post-acquisitionmovements in reserves are recognised in equity. Thecumulative post-acquisition movements are adjustedagainst the carrying amount of the investment. Whenthe Group's share of losses in an associate equals orexceeds its interest in the associate, including anyother unsecured receivables, the Group does notrecognise further losses, unless it has incurredobligations or made payments on behalf of theassociate, or is committed to providing continuedfinancial support.

In the Company's separate financial statements, theinvestment in an associate is reported using the costmethod. A list of associate is included in Note 10.

Unrealised gains on transactions between the Groupand its associate are eliminated to the extent of theGroup's interest in the associate. Unrealised lossesare also eliminated unless the transaction providesevidence of an impairment of the asset transferred.Accounting policies of the associate have beenchanged, where necessary, to ensure consistencywith the policies adopted by the Group.

2.4 Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquidinvestments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown withinborrowings in current liabilities on the balance sheet.


2.5 Investments

(a) Short-term investments

Short-term investments represent bills of exchange,which are accepted as payment in settlement ofcustomers' accounts, and are carried at face value.The bills of exchange on hand at the balance sheetdate are expected to be held to maturity and areclassified as such in the financial statements. In caseswhere the carrying value of the bills is less than theirrecoverable amount, an impairment loss is charged tothe consolidated and company statements of income.

(b) Available-for-sale financial assets

Available-for-sale financial assets are non-derivativesthat are either designated in this category or notclassified in any of the other categories. They areincluded in non-current assets unless managementintends to dispose of the investment within 12 monthsof the balance sheet date.

Investments are initially recognised at fair value plustransaction costs. Financial assets are derecognisedwhen the rights to receive cash flows from theinvestments have expired or have been transferredand the Group has transferred substantially all risksand rewards of ownership. Available-for-sale financialassets are subsequently carried at fair value basedon the quoted bid price on the Stock Exchange ofThailand at the balance sheet date.

Unrealised gains or losses arising from changes inthe fair value of investments classified as available-for-sale are recognised, net of tax, in equity. Wheninvestments classified as available-for-sale are soldor impaired, the accumulated fair value adjustmentsrecognised in equity are included in the consolidatedand company statements of income as part of otherincome or costs. Dividends on available-for-salefinancial assets are recognised in the consolidatedand company statements of income as part of otherincome when the Group's and Company's right toreceive payment is established.

2.6 Trade receivables

Trade receivables are carried at original invoice amount and subsequently measured at the invoice amount lessallowance for impairment. An allowance for impairment is established when there is objective evidence that the Group willnot be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties ofthe debtor, probability that the debtor will enter bankruptcy or financial reorganisation and default or delinquency inpayments are considered indicators that the trade receivable is impaired. The amount of the allowance is the differencebetween the carrying amount and the amount expected to be collectible. The carrying amount of the asset is reducedthrough the use of an allowance account, and the amount of the loss is recognised in the statement of income within'selling expenses'. Subsequent recoveries of accounts previously written-off are credited against 'selling expenses' in thestatement of income.

2.7 Inventories

Inventories are stated at the lower of cost or net realisable value. Cost is determined under the following methods:

Crude oil and petroleum products First-in, first-out method

Chemical products First-in, first-out method

Materials and supplies Average unit cost method

Other merchandise Average unit cost method

Purchase cost includes the purchase price and costs directly attributable to the acquisition of the inventory, such as importduties and transportation charges, less all attributable discounts, allowances or rebates. The cost of finished goods isprimarily comprised of raw materials, transportation costs, direct labour, and direct manufacturing expenditure. Netrealisable value is the estimated selling price in the ordinary course of business, less applicable variable sellingexpenses. Allowance is made, where necessary, for obsolete, slow-moving and defective inventories.


2.8 Current and deferred income tax

The tax expense for the period comprises current anddeferred income tax. Tax is recognised in the statementsof income, except to the extent that it relates to itemsrecognised directly in equity. In this case, the tax is alsorecognised in equity.

The current income tax charge is calculated on the basisof the tax laws enacted or substantially enacted at thebalance sheet date. Management periodically evaluatespositions taken in tax returns with respect to situations inwhich applicable tax regulations are subject tointerpretation and establishes provisions whereappropriate on the basis of amounts expected to be paidto the tax authorities.

Deferred income tax is recognised, using the liabilitymethod, on temporary differences arising between thetax bases of assets and liabilities and their carryingamounts in the consolidated and company financialstatements. However, the deferred income tax is notaccounted for if it arises from initial recognition of an

asset or liability in a transaction, other than a businesscombination, that at the time of the transaction affectsneither accounting nor taxable profit or loss. Deferredincome tax is determined using tax rates (and laws) thathave been enacted or substantially enacted by thebalance sheet date and expected to apply when therelated deferred income tax asset is realised or thedeferred income tax liability is settled.

Deferred income tax assets are recognised only to theextent that it is probable that future taxable profit will beavailable against which the temporary differences can beutilised.

Deferred income tax is provided on temporary differencesarising on investments in subsidiaries and associates,except where the timing of the reversal of the temporarydifference is controlled by the Group and it is probablethat the temporary difference will not reverse in theforeseeable future.

2.9 Intangible assets

(a) Royalties and licenses

Acquired royalties and licenses are shown at historical cost. Royalties and licenses have a finite useful life and arecarried at cost less accumulated amortisation. Amortisation is calculated using the straight line method to allocate thecost of royalties and licenses over their estimated useful lives (5 to 20 years).

(b) Computer software

Acquired computer software licenses are capitalised on the basis of costs incurred to acquire and bring to use thespecific software. Costs associated with developing or maintaining computer software programs are recognised as anexpense as incurred. Costs that are directly associated with the development of identifiable and unique softwareproducts controlled by the Group, and which will probably generate economic benefits exceeding costs beyond oneyear, are recognised as intangible assets. Costs include the software development employee costs and an appropriateportion of relevant overheads.

Computer software development costs recognised as assets are amortised over their estimated useful lives (5 to 15years).


2.10 Property, plant and equipment

Land is stated at historical cost. All other property, plantand equipment is stated at historical cost less accumulateddepreciation. Historical cost includes expenditure that isdirectly attributable to the acquisition of the items.

Subsequent costs are included in the asset's carryingamount or recognised as a separate asset, as appropriate,only when it is probable that future economic benefitsassociated with the item will flow to the Group and thecost of the item can be measured reliably. All otherrepairs and maintenance are charged to the statementsof income during the financial period in which they areincurred.

Depreciation is calculated using the straight-line methodto allocate the cost of each asset, except for land which isconsidered to have an indefinite life, to its residual valueover its estimated useful life, as follows:

Buildings 20 years

Plant and equipment 3 to 20 years

An asset's carrying amount is written down immediatelyto its recoverable amount if the asset's carrying amount isgreater than its estimated recoverable amount (Note2.11).

Gains and losses on disposals are determined bycomparing the proceeds with the carrying amount andare recognised within 'selling expenses', 'administrativeexpenses' and 'other income' in the statements ofincome.

Net borrowing costs that are directly attributable tofinance the construction of projects are capitalised aspart of the cost of the project and depreciated over theuseful life of the related asset.

2.11 Impairment of non-financial assets

Assets that have an indefinite useful life, for example land, are not subject to depreciation or amortisation and are testedannually for impairment. Assets that are subject to depreciation, or amortisation, are reviewed for impairment wheneverevents or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss isrecognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amountis the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assetsare grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

2.12 Leases - where the Group is the lessee

The Group leases certain property, plant or equipment.Leases of property, plant and equipment, where theGroup has substantially all the risks and rewards ofownership, are classified as finance leases. Financeleases are capitalised at the inception of the lease at thelower of the fair value of the leased asset and the presentvalue of the minimum lease payments.

Each lease payment is allocated between the liabilityand finance charges so as to achieve a constant rate onthe finance balance outstanding. The correspondingrental obligations, net of finance charges, are included infinance lease liabilities. The interest element of thefinance cost is charged to the consolidated and company

statements of income over the lease period so as toproduce a constant periodic rate of interest on theremaining balance of the liability for each period. Theproperty, plant and equipment acquired under financeleases is depreciated over the shorter of the useful life ofthe asset and the lease term.

Leases in which a significant portion of the risks andrewards of ownership are retained by the lessor areclassified as operating leases. Payments made underoperating leases, net of any incentives received from thelessor, are charged to the statements of income on astraight-line basis over the period of the lease.


2.13 Borrowings

Borrowings are recognised initially at contractual amounts, net of transaction costs incurred. Borrowings are subsequentlystated at amortised cost with any difference between the proceeds, net of transaction costs, and the redemption valuebeing recognised in the consolidated and company statements of income over the period of the borrowings using theeffective interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of theliability for at least 12 months after the balance sheet date.

2.14 Provision for pensions and employee benefits

The Group operates a Provident Fund that is a defined contribution scheme in accordance with the Provident Fund ActB.E. 2530. The Provident Fund is funded by payments from employees and by the Group. Contributions to the ProvidentFund are charged to the consolidated and company statements of income in the year to which they relate.

In addition, the Group operates Employee Separation Benefit and Service Allowance Plans. Entitlement to these benefitsis based on a minimum service period, final month's salary and the plan provisions.

The Group provides for its contractual liabilities for payments to employees in accordance with the retirement laws andregulations of Thailand. The benefit is provided based on years of service and the estimated remuneration atretirement.

2.15 Provisions

Provisions are recognised when the Group has apresent legal or constructive obligation as a result ofpast events such that it is probable that an outflow ofresources will be required to settle the obligation,and the amount has been reliably estimated.Where the Group expects a provision to bereimbursed, for example under an insurancecontract, the reimbursement is recognised as aseparate asset at the time when reimbursement isvirtually certain.

Provisions are measured at the present value of theexpenditures expected to be required to settle the obligationusing a pre-tax rate that reflects current market assessmentsof the time value of money and the risks specific to theobligation. The increase in the provision due to passage oftime is recognised as interest expense.

2.16 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new shares are shown inequity as a deduction, net of tax, from the proceeds.

2.17 Foreign currency translation

Items included in the financial statements of each of the Group's entities are measured using Thai Baht. The company andconsolidated financial statements are presented in Thai Baht.

Foreign currency transactions are translated into the presentation currency using the exchange rates prevailing at thedates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and fromthe translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies arerecognised in the consolidated and company statements of income.


2.18 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sales of goods and services in theordinary course of the Group's activities. Revenue is shown net of value-added tax, returns, rebates and discounts andafter eliminating sales within the Group.

The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economicbenefits will flow to the entity and when specific criteria have been met for each of the Group's activities as describedbelow.

(a) Sales of goods

Sales of goods are recognised at the time when therisks and rewards of ownership have passed to thebuyer which is generally at the point of delivery.

(b) Sales of services

The Group receives rental income and franchise feesfrom dealers who operate branded retail stations.Revenue is recognised in the period in which theservices are provided.

(c) Interest income

Interest income is recognised on a time-proportionbasis using the effective interest method.

(d) Dividend income

Dividend income is recognised when the right toreceive payment is established.

When inventories are exchanged or swapped for inventories which are of a similar nature, and value, the exchange is notconsidered a transaction which generates revenue.

2.19 Dividend distribution

Dividend distributions to the Company's shareholders are recognised as a liability in the consolidated and companyfinancial statements in the period in which the dividends are approved by the Company's shareholders.

2.20 Financial instruments

Financial assets carried on the balance sheet include cash and cash equivalents, short-term investments, tradereceivables, trade receivables from a related party, amounts due from related parties, loans to related parties, tax claimreceivable, and other assets. Financial liabilities carried on the balance sheet include borrowings, trade and otherpayables, amounts due to related parties, loans from related parties, and other liabilities. The particular recognitionmethods adopted are disclosed in the individual policy statements associated with each item where applicable.

2.21 Segment reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to risksand returns that are different from those of other business segments.

2.22 Non-current assets (or disposal groups) held-for-sale

Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to berecovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lowerend of the carrying amount and fair value less cost to sell if their carrying amount is to be recovered principally through asale transaction rather than through continued use.


3 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, includingexpectations of future events that are believed to be reasonable under the circumstances.

3.1 Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,not necessarily equal the related actual results. The estimates and assumptions that have a significant risk of causing amaterial adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Recognition of deferred tax assets associated with tax losses carried forward

A deferred tax asset is recognised to the extent it is probable that it will be utilised. Such an assessment is based upon(1) management's review of forecast financial information for at least five years, and (2) management have assessed itto be probable that the Group will generate taxable income sufficient to fully utilise the tax losses that exist.

3.2 Critical judgments in applying the entity's accounting policies

(a) Fair value of investment in an associate

The investment in an associate is reported using thecost method in the company financial statements. Aprovision for impairment was recognised in previousyears as the cost of the investment in an associateexceeded the recoverable amount. Following acombination of capital restructuring of the associateand an improving long-term outlook, managementmade an assessment as to whether the impairmentprovision should be reversed. In making thisassessment, management produced and reviewed acashflow projection and financial forecast, andconcluded that the entire impairment previouslyrecognized should be reversed. The reversal wasmade in 2008 (Note 10).

(b) Contingent liabilities

The Group has not recorded any provision relating tothe litigation disclosed in Note 28 despiteunfavourable verdicts in both the Trial Court in 2004,and the Appeal Court in July 2008. The Companycontinues to deny the alleged wrongdoing anddisagrees with the Courts' conclusions. Managementhave reviewed the case with outside counsel andbelieves that no provision is necessary based onthe facts of the case. As a result of this processmanagement appealed the judgment to the SupremeCourt on 29 September 2008.

4 Segmental information

As of 31 December 2009, the Group is organised into two main business segments, namely:

Downstream, which includes the refining and marketing of petroleum products as well as, the operation of retail servicestations; and,

Petrochemicals, which includes the manufacturing and marketing of chemical products.

Inter-segment transactions are priced under normal commercial terms and conditions that would also be available tounrelated third parties.


The segment information for the year ended 31 December 2009 are as follows:

The segment information for the year ended 31 December 2008 are as follows:

Downstream Petrochemicals Group

Total segment revenue 169,026,670 30,180,045 199,206,715Inter-segment revenue (22,181,646) (14,115,086) (36,296,732)

Revenue 146,845,024 16,064,959 162,909,983

Segment result 5,931,349 478,938 6,410,287

Segment fixed assets 21,651,267 6,310,696 27,961,963

Downstream Petrochemicals Group

Total segment revenue 234,937,553 39,140,645 274,078,198Inter-segment revenue (31,309,616) (20,535,044) (51,844,660)

Revenue 203,627,937 18,605,601 222,233,538

Segment result (7,169,327) (1,863,931) (9,033,258)

Segment fixed assets 20,208,780 6,920,408 27,129,188

5 Cash and cash equivalents

The interest rate on cash at bank averaged 1% (2008: 2%).

Cash, cash equivalents and bank overdrafts include the following for the purposes of the statements of cash flows:


2009 2008 2009 2008

Cash at bank and on hand 1,167,821 641,866 948,413 481,768


2009 2008 2009 2008

Cash at bank and on hand 1,167,821 641,866 948,413 481,768Bank overdrafts (Note 16) (48,164) (6,499) (48,164) (6,499)

1,119,657 635,367 900,249 475,269


6 Trade receivables, net

Outstanding trade receivables, as at 31 December 2009 and 31 December 2008, are analysed as follows:


2009 2008 2009 2008

Trade receivables, gross 4,720,278 3,554,763 4,699,425 3,544,671Less: Allowance for impairment of trade

receivables (55,079) (64,191) (55,079) (64,191)

Trade receivables, net 4,665,199 3,490,572 4,644,346 3,480,480

7 Inventories


2009 2008 2009 2008

Current 4,649,416 3,470,823 4,628,563 3,460,731Overdue:

Less than 3 months 11,942 15,322 11,942 15,322 3 to 6 months 370 3,652 370 3,652 6 to 12 months 906 2,447 906 2,447 Over 12 months 57,644 62,519 57,644 62,519

4,720,278 3,554,763 4,699,425 3,544,671

Less: Allowance for impairment of trade receivables (55,079) (64,191) (55,079) (64,191)

4,665,199 3,490,572 4,644,346 3,480,480

Petroleum products of Baht 1,042,351 thousand (2008: Petroleum products and chemical products of Baht 2,098,686thousand and Baht 547,738 thousand, respectively) are carried at net realisable value with this being lower than cost.

The provisions of the Oil Trading Act B.E. 2543 require the Group to maintain certain minimum levels of inventory at all times.As at 31 December 2009, the value of this inventory amounted to Baht 8,642,735 thousand (2008: Baht 6,310,050 thousand).


2009 2008 2009 2008

Crude oil 8,441,160 5,621,340 8,441,160 5,621,340Petroleum products 8,161,920 5,534,848 7,892,984 5,388,163Chemical products 986,320 868,567 986,320 868,567Materials and supplies 690,804 579,011 690,804 579,011Other merchandise 103,427 120,344 4,701 8,600

18,383,631 12,724,110 18,015,969 12,465,681


The tax claim receivable primarily related to value-added tax and subsidy claims which are expected to be refunded within 12months.

8 Tax claim receivable

9 Other current assets


2009 2008 2009 2008

Accounts receivable - other 290,050 199,000 262,202 161,082Prepaid rental and deferred charges 718,293 394,353 915,488 591,548

1,008,343 593,353 1,177,690 752,630

Prepaid rental and deferred charges primarily relate to prepaid excise tax and the short-term portion of rental prepayments onservice stations.

10 Investments in subsidiaries and an associate

The movements in investments in subsidiaries and an associate are as follows:


2009 2008 2009 2008

At 1 January 193,224 (24,837) 1,843,949 114,589Share of profit from an associate 261,547 218,061 - -Reversal of impairment provision on investment

in an associate - - - 1,729,360

At 31 December 454,771 193,224 1,843,949 1,843,949

In 2008, following a review of an impairment provision previously booked in respect of an investment in an associate,management concluded that it was appropriate to fully reverse this provision in the company financial statement based on anassessment of projected future cash flows (Note 3.2 (a)).


10.1 Subsidiaries

The principal subsidiaries, all of which are incorporated and domiciled in Thailand, are:

The ownership percentages detailed above include the effects of both direct and indirect ordinary shareholdings, butexclude preference shares. The Company does not own any of the preference shares issued by these subsidiaries, buthas the ability to govern the financial and operating policies of each subsidiary.

10.2 Associate

The Company holds a 20.78% interest in an associate, Thai Petroleum Pipeline Company Limited ("Thappline"), which isincorporated and domiciled in Thailand with its primary business activity being the operation of a petroleum pipelinebusiness.

The Group's share of the results of its associate, which is unlisted, and its aggregated assets and liabilities, are as follows:

Consolidated

2009 2008

Assets 1,815,352 1,787,274Liabilities (1,360,581) (1,594,050)

Net assets 454,771 193,224

Revenues 570,788 529,162

Net profit 261,547 218,061

% Ordinary shareCost method ownership

Business 2009 2008 2009 2008

Mobil Enterprises Lubes and Specialties 833 833 100.00 100.00(Thailand) Limited

Industry Promotion Real Estate Leasing 51,484 51,484 100.00 100.00Enterprises Limited

United Industry Real Estate Leasing 58,939 58,939 100.00 100.00Development CompanyLimited and its subsidiaries

- Pacesetter EnterprisesLimited Real Estate Leasing 3,333 3,333 99.99 99.99

- Thai C-CenterCompany Limited Service Station Operator - - 99.99 99.99


11 Available-for-sale financial assets

Consolidated and Company

2009 2008

At 1 January 193,636 406,036Unrealised gain/(loss) recognised in equity (Note 21b) 100,800 (212,400)Write-off of other investment (Note 27) (412) -Less: impairment provision on investment (Note 27) (2,424) -

At 31 December 291,600 193,636

Available-for-sale financial assets consist primarily of an investment in equity securities of Bangkok Aviation Fuel ServicesPublic Company Limited (BAFS) which is listed on the Stock Exchange of Thailand.

12 Deferred income tax, net

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assetsagainst current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes issued by thesame taxation authority. The following amounts, determined after appropriate offsetting, are shown in the consolidated andcompany balance sheets:


2009 2008 2009 2008

Deferred tax assets:- To be recovered after more than 12 months 4,920,310 5,540,340 4,735,391 5,333,301- To be recovered within 12 months 521,100 1,626,300 521,100 1,626,300

5,441,410 7,166,640 5,256,491 6,959,601Deferred tax liabilities:- To be recovered after more than 12 months (76,680) (46,440) (76,680) (46,440)

Deferred tax assets, net 5,364,730 7,120,200 5,179,811 6,913,161

Deferred income taxes are calculated on all temporary differences, under the liability method, using the statutory tax rate of30% in both years presented.

The gross movement of the deferred income tax account is as follows:


2009 2008 2009 2008

At 1 January 7,120,200 3,880,939 6,913,161 3,687,597(Charged)/credited to the statements of income (Note 25) (1,725,230) 3,056,010 (1,703,110) 3,042,313Tax on IPO costs credited directly to equity - 119,531 - 119,531Tax (charged)/credited directly to equity (Note 21b) (30,240) 63,720 (30,240) 63,720

At 31 December 5,364,730 7,120,200 5,179,811 6,913,161

The transaction costs relating to the IPO of Baht 398,436 thousand (Note 19) can be utilised to offset future taxable income.On this basis a deferred income tax asset of Baht 119,531 thousand was recognised in 2008.


The movement in deferred income tax assets and liabilities during the year, without taking into consideration the offsetting ofbalances within the same tax jurisdiction, is as follows:

Consolidated

(Charged)/ (Charged)/

Credited to Credited to

At 1 Statements At 31 Statements At 31

January of Income/ December of Income/ December

2008 Equity 2008 Equity 2009

Deferred tax assetsDepreciation 607,787 (58,647) 549,140 (52,564) 496,576Pensions and employee benefits 319,885 31,861 351,746 47,284 399,030Tax losses carried forward 2,772,196 3,236,128 6,008,324 (1,703,574) 4,304,750Others 291,231 (33,801) 257,430 (16,376) 241,054

Deferred tax assets 3,991,099 3,175,541 7,166,640 (1,725,230) 5,441,410

Deferred tax liabilitiesUnrealised gain on available-for- sale financial assets (Note 21b) (110,160) 63,720 (46,440) (30,240) (76,680)

Deferred tax liabilities (110,160) 63,720 (46,440) (30,240) (76,680)

Company

(Charged)/ (Charged)/

Credited to Credited to

At 1 Statements At 31 Statements At 31

January of Income/ December of Income/ December

2008 Equity 2008 Equity 2009

Deferred tax assetsDepreciation 607,787 (58,647) 549,140 (52,564) 496,576Pensions and employee benefits 319,885 31,861 351,746 47,284 399,030Tax losses carried forward 2,763,941 3,222,431 5,986,372 (1,681,622) 4,304,750Others 106,144 (33,801) 72,343 (16,208) 56,135

Deferred tax assets 3,797,757 3,161,844 6,959,601 (1,703,110) 5,256,491

Deferred tax liabilitiesUnrealised gain on available-for- sale financial assets (Note 21b) (110,160) 63,720 (46,440) (30,240) (76,680)

Deferred tax liabilities (110,160) 63,720 (46,440) (30,240) (76,680)

Deferred income tax assets are recognised for tax losses carried forward to the extent that the realisation of the related taxbenefit through future taxable profits is probable.


13 Intangible assets, net


Royalties

Computer and

software licences Total

At 1 January 2008Cost 615,591 805,248 1,420,839Less: Accumulated amortisation (314,148) (511,738) (825,886)

Net book amount 301,443 293,510 594,953

Year ended 31 December 2008Opening net book amount 301,443 293,510 594,953Reclassification from property, plant and equipment (Note 14) 16,945 - 16,945Amortisation charge (Note 27) (46,666) (23,077) (69,743)

Closing net book amount 271,722 270,433 542,155

At 31 December 2008Cost 632,536 805,248 1,437,784Less: Accumulated amortisation (360,814) (534,815) (895,629)

Net book amount 271,722 270,433 542,155

Year ended 31 December 2009Opening net book amount 271,722 270,433 542,155Disposals (Note 27) (400) - (400)Amortisation charge (Note 27) (45,999) (23,077) (69,076)

Closing net book amount 225,323 247,356 472,679

At 31 December 2009Cost 625,718 805,248 1,430,966Less: Accumulated amortisation (400,395) (557,892) (958,287)

Net book amount 225,323 247,356 472,679

All amortization charges are recorded in cost of sales, selling expenses and administrative expenses in the statements ofincome based on the nature of the asset.


Consolidated

Buildings,

plant and Construction

Land equipment in progress Total

At 1 January 2008Cost 5,275,981 47,533,887 577,979 53,387,847Less: Accumulated depreciation - (25,447,786) - (25,447,786)

Net book amount 5,275,981 22,086,101 577,979 27,940,061

Year ended 31 December 2008Opening net book amount 5,275,981 22,086,101 577,979 27,940,061Additions - - 1,163,925 1,163,925Disposals (Note 27) - (51,859) (689) (52,548)Transfers - 875,458 (875,458) -Reclassification to intangible assets (Note 13) - - (16,945) (16,945)Depreciation charge (Notes 23 and 27) - (1,905,305) - (1,905,305)

Closing net book amount 5,275,981 21,004,395 848,812 27,129,188

At 31 December 2008Cost 5,275,981 47,923,178 848,812 54,047,971Less: Accumulated depreciation - (26,918,783) - (26,918,783)

Net book amount 5,275,981 21,004,395 848,812 27,129,188

Year ended 31 December 2009Opening net book amount 5,275,981 21,004,395 848,812 27,129,188Additions - - 2,943,554 2,943,554Disposals (Note 27) (1,001) (170,272) - (171,273)Transfers - 599,992 (599,992) -Depreciation charge (Notes 23 and 27) - (1,939,506) - (1,939,506)

Closing net book amount 5,274,980 19,494,609 3,192,374 27,961,963

At 31 December 2009Cost 5,274,980 47,980,360 3,192,374 56,447,714Less: Accumulated depreciation - (28,485,751) - (28,485,751)

Net book amount 5,274,980 19,494,609 3,192,374 27,961,963

14 Property, plant and equipment, net


Company

Buildings,

plant and Construction

Land equipment in progress Total

At 1 January 2008Cost 675,420 47,168,616 577,979 48,422,015Less: Accumulated depreciation - (25,101,027) - (25,101,027)

Net book amount 675,420 22,067,589 577,979 23,320,988

Year ended 31 December 2008Opening net book amount 675,420 22,067,589 577,979 23,320,988Additions - - 1,163,925 1,163,925Disposals (Note 27) - (51,859) (689) (52,548)Transfer - 875,458 (875,458) -Reclassification to intangible assets (Note 13) - - (16,945) (16,945)Depreciation charge (Notes 23 and 27) - (1,887,382) - (1,887,382)

Closing net book amount 675,420 21,003,806 848,812 22,528,038

At 31 December 2008Cost 675,420 47,557,907 848,812 49,082,139Less: Accumulated depreciation - (26,554,101) - (26,554,101)

Net book amount 675,420 21,003,806 848,812 22,528,038

Year ended 31 December 2009Opening net book amount 675,420 21,003,806 848,812 22,528,038Additions - - 2,943,553 2,943,553Disposals (Note 27) - (170,271) - (170,271)Transfers - 599,992 (599,992) -Depreciation charge (Notes 23 and 27) - (1,921,582) - (1,921,582)

Closing net book amount 675,420 19,511,945 3,192,373 23,379,738

At 31 December 2009Cost 675,420 47,615,090 3,192,373 51,482,883Less: Accumulated depreciation - (28,103,145) - (28,103,145)

Net book amount 675,420 19,511,945 3,192,373 23,379,738

Seven plots of land owned by a subsidiary, with a net book value of Baht 405,285 thousand, which were pledged as collateralwith the Revenue Department in respect of its income tax liabilities were redeemed from the Revenue Department in 2009.

As at 31 December 2009, the cost of fully depreciated property, plant and equipment of the Group, and Company, that werestill in use amounted to Baht 10,966,153 thousand (2008: Baht 11,017,583 thousand).

Borrowing costs of Baht 28,888 thousand (2008: nil), arising from the proportion of general borrowings which were used forfinancing a project at the refinery, were capitalised during the year and are included in the 'Additions' line. A capitalisation rateof 2.1% (2008: nil) was used to represent the actual average cost of borrowings.

15 Prepaid rental and deferred charges

Prepaid rental and deferred charges primarily relate to the long-term portion of rental prepayments on service stations andrefinery catalyst replacement.



2009 2008

CurrentBank overdrafts (Note 5) 48,164 6,499Short-term borrowings 19,565,009 16,965,000Current portion of long-term bank borrowings 2,750,000 11,000,000

22,363,173 27,971,499

Non-currentBank borrowings 5,500,000 -

27,863,173 27,971,499

Bank borrowings and other facilities detailed below are unsecured and bear interest at rates based on prevailing marketrates. The interest rates in 2009 ranged between 1% to 4% per annum (2008: 3% to 5% per annum).

The carrying amounts of borrowings at each year-end reasonably reflect their fair values. All borrowings are denominated inBaht and are unsecured.

16 Borrowings

Short-term borrowings

In 2009, the Company fully repaid two short-term loans inthe amount of Baht 7,000 million and Baht 1,000 millionand obtained a new unsecured loan of Baht 8,000 millionwhich is due for repayment in December 2010. Theloan bears a floating rate of interest which averagedapproximately 2% per annum in 2009.

The Company received an approval from the Securitiesand Exchange Commission to offer for sale Baht 8,000million of Bills of Exchange in a revolving program. As at31 December 2009, approximately Baht 4,795 million ofBills of Exchange was outstanding (2008: nil) at anaverage interest rate of 1.2%.

In addition, the Company made a net repayment ofrevolving short-term facilities of approximately Baht 2,195million.

Syndicated long-term loan

The Company entered into a long-term syndicated loanof Baht 11,000 million in December 2007. The loan isrepayable in 8 semi-annual installments commencing inJune 2009. The loan bears a floating interest rate whichaveraged 2.2% per annum in 2009 (2008: 4.3% perannum). As at 31 December 2009, the outstanding loanbalance is Baht 8,250 million, of which Baht 5,500 millionwill be due after 2010.

As at 31 December 2008, in accordance with TAS 1"Presentation of Financial Statements", the Companyclassified Baht 8,250 million long-term debt under thesyndicated loan agreement as a current liability due tothe Company's debt service coverage ratio as of 31December 2008 had fallen below specified thresholdslargely as a result of the rapid fall in crude oil prices andthe Company's use of the first-in, first-out inventory costmethod. The Company and the lenders agreed that thiscondition was not an event of default. Notwithstandingthis fact, on 5 February 2009, the Company obtainedconsent from its lenders to waive the debt servicecoverage ratio requirement for the 31 December 2008determination date with the effect that no future event ofdefault can arise with respect to this date. In 2009, theCompany has reclassified this long-term debt as a non-current liability.


17 Trade and other payables

Other tax payable represents excise tax payable generated as a result of normal operations.


2009 2008 2009 2008

Trade accounts payable 1,819,448 1,354,554 1,755,254 1,282,797Other tax payable 486,569 276,933 468,205 262,972Other payables and accruals 842,638 706,709 821,439 667,873

3,148,655 2,338,196 3,044,898 2,213,642

18 Provision for pension and employee benefits


2009 2008

At 1 January 736,126 680,968Net expense charged to the statements of income 109,858 85,057Payments to separating employees and retirees (19,581) (29,899)

At 31 December 826,403 736,126

19 Share capital and premium

Issued and paid-up share capital

Number of

Shares Ordinary Share

(thousands) Shares Premium Total

At 1 January 2008 2,610,000 12,877,218 - 12,877,218Issuance of shares 850,858 4,197,963 4,031,711 8,229,674

At 31 December 2008 3,460,858 17,075,181 4,031,711 21,106,892

At 1 January and 31 December 2009 3,460,858 17,075,181 4,031,711 21,106,892

In April 2008, the Company issued 773,333 thousand ordinary shares through an initial public offering ("IPO") on the StockExchange of Thailand ("SET"), with an offer price of Baht 10 per share. The Company registered the additional paid-up sharecapital with the Ministry of Commerce on 30 April 2008. The shares commenced trading on the SET on 6 May 2008.

On 6 June 2008, the Company issued a further 77,525 thousand ordinary shares under an over allotment option at the offerprice of Baht 10 per share. The Company registered the additional paid-up share capital with the Ministry of Commerce on 6June 2008.

Transaction costs relating to the IPO of Baht 398,436 thousand were offset with the proceeds from the IPO.

Following completion of the initial public offering, the shareholdings of the Ministry of Finance and ExxonMobil were 7.33%and 65.99%, respectively.

As at 31 December 2009, the total authorised number of ordinary shares is 3,467,917 thousand shares (2008: 3,467,917thousand shares) with a par value of Baht 4.9338 per share. All issued shares are fully paid.


20 Dividends

The Company paid the following interim dividend during the year ended 31 December 2009:

Baht 0.25 per share on 28 September 2009 pursuant to resolutions passed by the Board of Directors on 31 August2009.

The Company paid the following interim dividends during the year ended 31 December 2008:

Baht 1 per share on 27 June 2008 pursuant to resolutions passed by the Board of Directors on 29 May 2008; and

Baht 0.50 per share on 26 September 2008 pursuant to resolutions passed by the Board of Directors on 28 August2008.

21 Other reserves

(a) Legal reserve


2009 2008

At 1 January 343,997 343,997Current year allocation of net profit 205,013 -

At 31 December 549,010 343,997

Under the Public Limited Companies Act B.E. 2535, the Company is required to set aside as a legal reserve at least 5percent of its net profit after taking into account any accumulated deficit brought forward until the reserve is not less than10 percent of the registered capital. The legal reserve is non-distributable.

(b) Fair value reserve

The movement of the fair value reserve for available-for-sale financial assets is as follows:


2009 2008

At 1 January 108,360 257,040Net unrealised gain/(loss) recognised in equity

(Notes 11 and 12) 70,560 (148,680)

At 31 December 178,920 108,360


22 Sales


2009 2008 2009 2008

Sales of goods 162,331,055 221,716,026 160,824,665 220,372,340Sales of services 578,928 517,512 691,336 623,426

162,909,983 222,233,538 161,516,001 220,995,766

23 Expenses by nature


2009 2008 2009 2008

Net changes in inventories offinished goods (2,745,226) 5,281,669 (2,618,674) 5,327,993

Raw materials and consumables used 145,032,380 211,219,403 144,191,810 210,381,279Depreciation on property, plant

and equipment (Note 14) 1,939,506 1,905,305 1,921,582 1,887,382Transport and distribution 704,511 790,018 704,418 789,946Research and development 69,072 129,155 69,072 129,155Operating lease payments 390,627 387,384 422,403 421,988Employee benefits expense 1,926,075 1,643,554 1,604,204 1,330,773Utilities 4,896,656 5,810,286 4,798,426 5,717,100Net gain on foreign exchange (228,873) (280,238) (228,873) (280,238)Other expenses 4,514,968 4,380,260 4,411,795 4,291,071

Total cost of sales and selling andadministrative expenses 156,499,696 231,266,796 155,276,163 229,996,449

The cost of sales included a portion of management benefit expenses attributable to the Group's executive officers under themanufacturing function of Baht 51,875 thousand (2008: Baht 41,476 thousand).

24 Finance costs, net


2009 2008 2009 2008

Interest income 5,650 54,953 108,642 159,625Interest expense (542,127) (1,243,821) (594,551) (1,333,483)

(536,477) (1,188,868) (485,909) (1,173,858)


25 Income tax expense/(credit)


2009 2008 2009 2008

Deferred tax (Note 12) 1,725,230 (3,056,010) 1,703,110 (3,042,313)Current tax 18,570 3,282 - 31

Income tax expense/(credit) 1,743,800 (3,052,728) 1,703,110 (3,042,282)

The tax on the Group's, and Company's, profit/(loss) before tax differs from the theoretical amount that would arise using theweighted average tax rate applicable to profits of the consolidated entities, or Company, as follows:


2009 2008 2009 2008

Profit/(loss) before tax 6,194,364 (9,916,480) 5,803,381 (8,361,554)

Tax calculated at domestic tax rates 1,858,309 (2,974,944) 1,741,014 (2,508,466)

Income not subject to tax (85,612) (67,956) (8,067) (522,728)Expenses not deductible for tax purposes 9,385 12,639 8,445 11,379Capital investment incentive (38,282) (22,467) (38,282) (22,467)

Income tax expense/(credit) 1,743,800 (3,052,728) 1,703,110 (3,042,282)

The weighted average applicable tax rate was 30% in each year presented.

26 Earnings per share

Basic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to equity holders of the Company by theweighted average number of ordinary shares in issue during the year.


2009 2008 2009 2008

Profit/(loss) attributable to equityholders of the Company 4,449,743 (6,864,581) 4,100,271 (5,319,272)

Weighted average number ofordinary shares in issue(thousands shares) 3,460,858 3,174,051 3,460,858 3,174,051

Basic earnings/(loss) per share(Baht per share) 1.29 (2.16) 1.18 (1.68)

There are no potential ordinary shares in issue during the periods presented and as such diluted earnings/(loss) per share isnot presented.


27 Cash generated from operations


2009 2008 2009 2008

Net profit/(loss) 4,450,564 (6,863,752) 4,100,271 (5,319,272)

Adjustments for:Depreciation (Note 14) 1,939,506 1,905,305 1,921,582 1,887,382Amortisation (Note 13) 69,076 69,743 69,076 69,743Allowance for impairment of trade

receivables (Note 6) (9,112) (53,860) (9,112) (53,860)Impairment provision on other investment

(Note 11) 2,424 - 2,424 -Write-off of other investment (Note 11) 412 - 412 -Reversal of impairment provision on

investment in an associate (Note 10) - - - (1,729,360)Write-down of inventory to net

realisable value 11,556 135,985 11,556 133,041Loss on disposal of property, plant and

equipment and intangible assets 154,231 14,952 153,949 14,952Share of profit from an associate (Note 10) (261,547) (218,061) - -Finance costs, net (Note 24) 536,477 1,188,868 485,909 1,173,858Dividends income (13,680) (16,920) (17,680) (20,920)Income tax expense/(credit) (Note 25) 1,743,800 (3,052,728) 1,703,110 (3,042,282)Net unrealised foreign exchange loss/(gain) 67,529 (78,433) 67,529 (78,433)

Changes in working capitalShort-term investments 2,161 104,809 2,161 104,809Trade receivables (1,164,110) 6,333,491 (1,153,349) 6,343,583Trade receivables from related parties - - (692,091) 750,619Amount due from related parties (87) (31,353) (8,082) (41,612)Inventories (5,671,077) 8,009,222 (5,561,844) 8,062,524Tax claim receivable (362,953) 2,330,531 (386,688) 2,350,627Other current assets (414,990) 400,086 (425,060) 418,405Prepaid rental and deferred charges 353,188 111,842 550,383 309,037Other non-current assets 7,610 (59,653) 7,642 (70,073)Trade and other payables 805,225 (1,027,085) 842,133 (1,028,137)Amount due to related parties 2,177,062 (3,854,377) 2,171,903 (3,860,787)Pensions and employee benefits 90,277 55,158 90,277 55,158Other non-current liabilities 7,163 (61,530) 7,163 (45,389)

Cash generated from operations 4,520,705 5,342,240 3,933,574 6,383,613

In the cash flow statement, proceeds from sale of property, plant and equipment and intangible assets comprise:


2009 2008 2009 2008

Net book amount (Notes 13 and 14) 171,673 52,548 170,671 52,548Loss on disposal of property, plant and

equipment and intangible assets (154,231) (14,952) (153,949) (14,952)

Proceeds from disposal of property, plantand equipment and intangible assets 17,442 37,596 16,722 37,596


28 Contingent liabilities

On 24 November 2004, the Company was fined Baht435,787 thousand in the Southern Bangkok Criminal Courtfor alleged false declarations relating to imports of lube basestocks in 1987 and 1988. The Company denied the allegedwrongdoing and disagreed with the Court's conclusions. Onthis basis, the Company appealed the conviction to theCourt of Appeal on 14 February 2005. On 16 July 2008, theCourt of Appeal confirmed the judgment of the lower court.

Following consultations with external legal counsel manage-ment continues to believe strongly in the merit of its defenseand, on this basis, appealed the judgment to the SupremeCourt on 29 September 2008. The Group, and the Company,have not recorded any provision in respect of the matter intheir financial statements.

As at 31 December 2009, the Group had contingent liabilitiesin respect of bank guarantees arising in the ordinary courseof business, amounting to Baht 58,836 thousand (2008: Baht2,377,077 thousand) to third parties. It is not anticipated thatany material liabilities will arise from these bank guarantees.

29 Commitments

Capital commitments

Capital expenditure contracted for at the balance sheet date but not yet incurred amounted to approximately Baht 667million (2008: Baht 700 million).

Operating lease commitments - Group company as lessee

The Group leases various plots of land on which retail service stations are operated under non-cancellable operatinglease agreements. The lease terms generally range between 15 and 25 years, and the majority of lease agreements arerenewable at the end of the lease period at market rate.

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:


2009 2008

No later than 1 year 10,328 18,758Later than 1 year and no later than 5 years 73,554 74,044Later than 5 years 29,867 38,252

113,749 131,054

Certain subsidiaries lease land to the Company, however, there are no future minimum lease payments in respect of suchleases which are prepaid (Notes 9 and 15).

30 Financial risk management

The Group's activities expose it to a variety of financial risks, which include market risk (including market prices for petroleumcommodities risk, foreign exchange risk and interest rate risk), credit risk, liquidity risk, and capital risk.


30.1 Market risk

(a) Market prices for petroleum commodities risk

The Group's financial results can be significantlyaffected from time to time by volatility and cyclicalmovement in the market prices for crude oil, petroleumand petrochemical products that are not predictable.Given its large size and the long-term nature of itsbusiness, the Group expects that this risk will bemoderated over time. The Group discourages the useof derivative instruments to manage the risk.

(b) Foreign exchange risk

The Group's activities are exposed to foreignexchange risk arising from various currencyexposures, primarily with respect to the US Dollar.Purchases of goods and export sales are primarilytransacted in US Dollars. Domestic sales aretransacted predominantly in Baht, and are thus notsubject to foreign exchange risk.

As at 31 December 2009, the Group has no short-term or long-term debts denominated in foreigncurrencies. In 2009, the Group did not enter into anyforward foreign currency contracts. The Group'sforeign exchange guidelines prohibit speculativeforeign exchange transactions.

(c) Interest rate risk

As the Group has no significant interest bearingassets, the Group's income and operating cash flowsare substantially independent of changes in marketinterest rates.

The interest rate risk arises from borrowings withthose issued at variable interest rates exposing theGroup to cash flow interest rate risk. The Groupcontinually optimises the mix in its borrowing facilitiesto maximise financing flexibility whilst minimisingfinancing cost.

30.2 Credit risk

Credit risk is managed on a Group basis. Credit risk primarily arises from cash and cash equivalents, and credit exposuresto wholesale and retail trade customers, including outstanding receivables and committed transactions. Credit risk inrespect of balances outstanding with related parties has been assessed to be low due to the overall strength of theExxonMobil Group.

In the case of cash and cash equivalents, only independently rated banks with a minimum rating of at least BBB-, orequivalent, are accepted.

For trade customers, risk evaluations are performed internally which include reviews of financial positions, businesssuccess indicators, past experience and other factors. Individual risk limits are set based on the resultant internal ratings inaccordance with limits set by management. Risk categories are established for individual customers based on internalcredit guidelines ranging from very low to very high risk. The risk categories are intended to reflect the risk of paymentdefault by a customer and are similar to the rating scales established by external rating agencies.

30.3 Liquidity risk

The Group manages liquidity risk by maintainingsufficient cash and cash equivalent balances. Inaddition, the Group maintains committed credit facilitiesas well as a number of uncommitted credit facilitiesfrom banks and related parties. The Group reviewsrequirements for future cash flows through the completionof an annual finance plan review. The finance planreview is completed for the forthcoming year to ensurethat estimates of future requirements are analysed suchthat appropriate facilities can be made available.

The Group currently has adequate financing sources. Asof 31 December 2009, the Group has uncommittedfacilities of Baht 65,968,438 thousand (2008: Baht

63,234,000 thousand). In 2008, the Group also receivedan approval from the Securities and ExchangeCommission to offer for sale Baht 8,000,000 thousand ofbills of exchange in a revolving program, of which Baht4,795,009 thousand has been utilized as of 31 December2009 (2008: nil).

Liquidity risk may also arise if customers are not able tosettle obligations to the Group within the normal creditterm. To manage this risk, the Group periodicallyassesses financial viability of customers and may requirecertain customers to provide bank guarantees or othersimilar instruments.


30.4 Capital risk

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in orderto provide returns to shareholders and benefits to other stakeholders. In the future, the Group may adjust the amount ofdividend paid to shareholders in order to maintain an appropriate capital structure. Annually, the Group completes afinance plan which seeks to establish positions for the current and future years' dividend projections.

31 Promotional privileges

The Company received promotional privileges from the Board of Investment (BOI) on 16 January 1998 in respect of theconstruction, and subsequent operation, of an aromatics plant adjacent to the Group's Sri Racha refinery. The plant had acapacity of approximately 350,000 tons per annum of paraxylene, a raw material utilised to produce polyester film, packingresin and fabrics. The Company further expanded the plant capacity to 500,000 tons per annum in 2004. The productsproduced are sold both domestically and on the export market with sales made through a related company. BOI privilegesgranted include 100% import duty exemption on certain machinery and equipment which will expire in 2010, and exemptionfrom corporate income tax for a period of eight years from the date that sales commenced. This income tax holiday expired on10 September 2007.

The Company's revenue, split between BOI and non-BOI promoted businesses are as follows:

BOI Non-BOI

Promoted Promoted Total

Year ended 31 December 2009Revenue from domestic activities 11,169,650 129,527,517 140,697,167Revenue from export activities 1,122,578 19,696,256 20,818,834

12,292,228 149,223,773 161,516,001

Year ended 31 December 2008Revenue from domestic activities 11,987,753 177,859,975 189,847,728Revenue from export activities 1,065,073 30,082,965 31,148,038

13,052,826 207,942,940 220,995,766

32 Related party transactions

The Group is controlled by ExxonMobil International Holdings Incorporated, which owns 65.43% of the Company's shareswith other companies within the ExxonMobil Group holding 0.56% of the shares as of 31 December 2009 and 2008. Theultimate holding company is Exxon Mobil Corporation. Both companies are incorporated in the United States of America. Afurther 7.33% of the shares are held by the Ministry of Finance as of 31 December 2009 and 2008, with the remaining sharesheld by a variety of institutional and retail investors. The significant investments in subsidiaries and an associate are set out inNote 10.

The following transactions were carried out with related parties:


(a) Sales of goods and services

Sales of goods and services between related parties are based on market prices and primarily relate to the sale ofpetroleum and petrochemical products.

(b) Purchases of goods and services

(c) Expenses

Expenses primarily relate to the provision of support services and are charged on either at cost or cost plus basis.


2009 2008 2009 2008

Sales of goods and services:- Subsidiaries - - 20,293,369 21,706,952- Other related parties 17,457,648 29,225,224 17,457,648 29,225,224

17,457,648 29,225,224 37,751,017 50,932,176


2009 2008

Purchases of goods:- Other related parties 110,481,694 184,168,045

Purchases of services:- An associate 625,678 540,218

111,107,372 184,708,263


2009 2008 2009 2008

Expenses paid to:- Subsidiaries - - 150,433 160,241- Other related parties 3,356,807 3,131,587 3,291,352 3,074,675

3,356,807 3,131,587 3,441,785 3,234,916

Purchases of goods from related parties primarily relate to the purchase of petroleum and petrochemical products.Purchases of services from an associate relate to the provision of pipeline transportation of the Group's products.Purchases of goods and services are based on market prices.


(d) Finance costs, net

Interest charges are generally based on market rates at the time the relevant agreements were entered.

(e) Directors' remuneration


2009 2008

Salaries and other short-term employment benefits 125,544 79,282 Post-employment benefits 1,740 2,567

127,284 81,849


2009 2008 2009 2008

Interest income received from:- Subsidiaries - - 103,029 104,798- Other related parties 2,120 21,066 2,120 21,066

2,120 21,066 105,149 125,864

Interest expenses paid to:- Subsidiaries - - 52,477 89,740- Other related parties 6,595 - 6,595 -

6,595 - 59,072 89,740

(f) Year-end balances arising from sales/purchases of goods/services and expenses


2009 2008 2009 2008

Trade receivables:- Subsidiary - - 1,156,949 464,858

Amounts due from:- Subsidiaries - - 40,313 35,078- Other related parties 38,006 41,730 35,851 39,142

38,006 41,730 76,164 74,220

Amounts due to:- Subsidiaries - - 17,469 13,710- Other related parties 5,621,652 3,372,949 5,611,311 3,367,768

5,621,652 3,372,949 5,628,780 3,381,478

Trade receivables from a related party arise mainly from the sale of petroleum products with credit terms beingapproximately 30 days. The receivables are unsecured in nature and bear no interest.

Amounts due from related parties relate primarily to interest receivable on short-term and long-term loans (Note 32g).

The amounts due to related parties arise mainly from the purchase of petroleum and petrochemical products and haveno fixed repayment term, but are repayable on demand. The payables bear no interest.


Movements in short-term loans to other related parties are analysed as follows:


2009 2008 2009 2008

At 1 January 194,110 416,559 282,408 416,559Additional borrowings - 61,738 - 150,036Repayments of borrowings (194,110) (284,187) (282,408) (284,187)

At 31 December - 194,110 - 282,408

Short-term loans to other related parties are unsecured and have no fixed term of repayment. They bear interest basedon the minimum lending rate of the Bangkok Bank Public Company Limited which averaged 6.1% in 2009 (2008:7.1%).

Movements in long-term loans to subsidiaries are analysed as follows:


2009 2008 2009 2008

At 1 January - - 1,612,415 1,393,598Additional borrowings - - 205,892 218,937Repayments of borrowings - - (687) (120)

At 31 December - - 1,817,620 1,612,415

Long-term loans to subsidiaries are unsecured. They bear interest based on the minimum lending rate of BangkokBank Public Company Limited which averaged 6.1% in 2009 (2008: 7.1%).

(g) Loans to related parties


2009 2008 2009 2008

Short-term loans to:- Subsidiary - - - 88,298- Other related parties - 194,110 - 194,110

- 194,110 - 282,408

Long-term loans to:- Subsidiaries - - 1,817,620 1,612,415


(h) Loans from related parties

Movements in short-term loans from related parties are analysed as follows:


2009 2008 2009 2008

Short-term loans from:- Subsidiaries - - 582,948 915- Other related parties 240,993 - 240,993 -

240,993 - 823,941 915

Long-term loans from:- Subsidiaries - - 5,371 5,890


2009 2008 2009 2008

At 1 January - - 915 594,636Additional borrowings 263,900 - 1,027,346 750,426Repayments of borrowings (22,907) - (204,320) (1,344,147)

At 31 December 240,993 - 823,941 915

Short-term loans from related parties are unsecured and have no fixed term of repayment. They bear interest based onthe minimum lending rate of Bangkok Bank Public Company Limited which averaged 6.1% in 2009 (2008: 7.1%).

Movements in long-term loans from related parties are analysed as follows:


2009 2008 2009 2008

At 1 January - - 5,890 6,243Additional borrowings - - 5,190 5,332Repayments of borrowings - - (5,709) (5,685)

At 31 December - - 5,371 5,890

Long-term loans from subsidiaries are unsecured. They bear interest based on the minimum lending rate of BangkokBank Public Company Limited which averaged 6.1% in 2009 (2008: 7.1%).

33 Asset retirement obligations

It is recognised that the Group may incur asset retirement obligations for the dismantling and site restoration costs of itsmanufacturing facilities. The timing and quantum of cash flows is difficult to estimate as the Group has no intention todecommission the sites in the near future. Accordingly and consistent with industry practice, no provision is recorded for assetretirement obligations as the amount cannot be measured with sufficient reliability due to the significant uncertaintiesinvolved.

Documents

ESSO : Annual Report 2009